Agency Workers Directive could lead to job losses, warns CBI

As speculation continues about government appeasement of the unions in the face of an approaching general election, excerpts from a new CBI survey released on Sunday highlight the expected impact of the European Agency Workers Directive.

Companies are increasingly concerned that implementation of the draft directive could cause "irreparable damage" to the UK temping market, triggering a huge cut in job opportunities.

The draft EU directive suggests that full employment rights should be extended to temporary workers after just six weeks. The TUC wants it to go further still and are pressing the government to end its opposition so that equal rights would apply from day one.

But figures from the annual CBI-Pertemps Employment Trends Survey - to be released in full in the Autumn - show that 60 per cent of respondents fear the proposed temps law (with the six-week concession) would lead to reduced temping opportunities. This compares with 47 per cent in the 2003 survey and clearly illustrates growing concern about closing off this vital route into work.

The survey of over 500 firms also shows that 58% of firms believe the temps directive would lead to significant extra costs.

The law will hit the UK hardest because Britain has the largest temping market in Europe, employing over 700,000 people.

Other countries critical of the directive include Germany, Denmark and Ireland.

Temporary workers play a vital role in the UK economy and are most commonly used to cover short-term cover for a vacant position (31% of firms), meet an upturn in demand (29%) and cover for staff absence (21%).

John Cridland, CBI Deputy Director-General, said: "This short-sighted directive would do irreparable damage to the UK's successful temping market. Taking on temps would become much less attractive, denying many the chance to progress into full-time employment.

"Temporary work offers excellent opportunities, particularly for those on the fringes of the labour market. The TUC wants companies to have to offer full rights to temps from day one, and this would help destroy the very jobs the unions are supposed to protect.

"This country has the lowest unemployment in Europe and our flexible labour market is key to that success. Companies understand how important this is, but regrettably the EU and the unions often do not."

The CBI continues to call for a substantially longer period before agency temp legislation kicks in, ideally one year.