Equal rights for 'temps' may cost £636m a year

European Union plans to give "temps" the same pay as full-time employees would cost businesses £636m a year, the Government will say today.

An official assessment of the proposals also warns they could lead to "greater job insecurity" for people in regular jobs and "the crowding out of permanent job opportunities".

Ministers will pledge to fight proposals in Brussels to give all temps who have been in the job for six weeks the same rights as permanent workers.

The cost of giving temporary agency workers the same rights as regular employees will infuriate many businesses. The Department of Trade and Industry has calculated that temp agencies would have to pay £95m a year in extra pay and £31m in paid annual leave when the EU directive comes into force.

Businesses employing temps would face higher fees due to costs passed on from the agencies of £504m a year. There would also be extra administration costs of between £1.4m and £3.2m.

Official government estimates say that agency workers could earn an extra £366m a year under the proposals and an extra £118m in holiday pay and annual leave.