A proposed European directive for full and immediate rights to temporary workers would cause "irreparable damage" to Britain's job market, the Confederation of British Industry warned today.
The UK's largest employers' organisation said half of businesses would cut their use of agency workers if the measure went through.
Employment ministers from European Union countries are meeting today to hammer out a compromise on the regulations, which are strongly opposed by the UK government in their current form.
Brussels wants temporary workers to enjoy the same rights as their permanent colleagues at the point of starting but the UK is fighting for a 12-month delay before a temp qualifies for equal status.
Its position is supported by employers but is bitterly opposed by trade unions. Brussels has offered a compromise of a six-week derogation period, which the UK has rejected.
Digby Jones, the CBI's Director-General, has written to Anna Diamantopoulou, the EU Commissioner responsible for the directive, warning that the measure would harm the UK's labour market.
Britain has the largest temping market in Europe, employing more than 700,000 people, he said. "Without improvements, taking on temps will be less attractive and that will do irreparable damage, not just to business but to employees as well," he said.
The CBI published a survey by employment agency Pertemps showing that the draft directive would trigger a huge cut in job opportunities.
It found 47 per cent would cut use of agency temps. Tim Watts, chairman of Pertemps, said: "A large number of people choose only to do flexible work as it suits their lifestyles. Forcing these people out of the economy would be to the detriment of the economy."
Britain, Germany, Denmark and Ireland will argue the directive would undermine a valuable facility for companies and a way of getting people into work. Benelux countries, which already have similar rules, are pushing to have the directive accepted.
"The UK is trying to strike a balance between protecting agency workers and protecting their jobs," a UK government spokeswoman said. "Agency jobs can be an essential step on to the jobs ladder."
A minority of four states can block the directive but the UK could still be defeated, as not all its allies are insistent on the 12-month rule.
The UK government may be forced to accept a compromise of less than 12 months. It is understood that Germany may propose a three-month period that might command support.
But the EU measure is strongly supported by British trade unions, which believe it is inequitable to give temporary workers less rights to pay, holidays and maternity leave compared with their full time colleagues.
A TUC spokesman said: "This survey is just another report dreamt up by the cry-wolf employers' research department. The same people wrongly predicted that the national minimum wage and the working time directive would cost thousands of jobs."
The TUC estimates that almost three-quarters of the existing pool of agency workers would lose out if a 12-month qualifying period were imposed.
A separate survey published today showed that the UK has among the lowest levels of redundancy payouts in the EU.
According to Mercer, a consultancy, a white-collar employee aged 40, made redundant after 10 years on a salary of £20,000 would received £5,128 in the UK compared with £25,464 in Spain.Reuse content