A CBI survey claims that a draft EU directive on temporary agency work would cause 57 per cent of firms to offer fewer temp assignments. The EU directive proposes giving agency workers rights to the same pay and conditions as full-time staff in the organisation where they temp. Most significantly, it forces host firms to negotiate temps’ contractual terms, matters currently handled by the supplying agency.

CBI estimates based on the survey show that the resulting administrative burden would cause:

– 10 per cent of firms to stop using temps, with the loss of some 12,000 assignments

– 32 per cent to reduce agency work significantly, cutting up to 150,000 assignments.

– A further 135,000 assignments could also be at risk with 16 per cent of firms making small reductions. Only one per cent of firms said they would replace temps with permanent staff.

John Cridland, CBI Deputy Director-General, pointed out that the UK has around 770,000 agency workers, more than any other EU country. He acknowledged that the European Commission had responded to business concern by suggesting the rights should apply only after six weeks. But he made clear that any time limit of less than 12 months would be unacceptable to business as it would cover too few assignments. The CBI survey shows 65 per cent of assignments last longer than six weeks while 17 per cent last longer than 12 months.

Mr Cridland said: “The directive is a classic example of how rigid law can damage the people it is intended to protect. Employers in some countries will be relatively unaffected because temping agencies operate differently, while the UK would be badly hit. EU countries have different cultures, economies and labour markets. Unions should join employers and ensure governments retain the freedom to find ways of creating wealth and jobs.”

However, the TUC rejected these predictions. John Monks, TUC General Secretary, said: “Whenever new employment rights are proposed, the CBI, and other employers’ organisations, have claimed they will lead to fewer jobs, but this argument is not sustainable. The same arguments were deployed with the creation of the national minimum wage and working time regulations.

“Critics greeted these proposals with forecasts of a massive rise in unemployment and the loss of jobs. The exact opposite has happened. Since Spring 1997 the economy has generated 1.5 million new jobs, whilst unemployment has fallen from 8 per cent to 5 per cent.”