Contractors to get full employment rights

The plans, which have already been dubbed as unworkable by IT employment agencies give contractors the right to have the same pay, pensions, holiday cover, health insurance, interest free loans, share schemes and other benefits as long-term employees doing comparable jobs.

Currently agency staff are only legally entitled to minimum wage and a holiday allowance and no other employment benefits.

One of the proposals most likely to become law would give temporary employees the right to demand equal pay to permanent employees doing comparable work.

While this is unlikely to affect IT contractors, who often earn more than their permanent colleagues, call centre staff could get much more money.

Job agencies have complained that it would cost them too much to manage because it requires them to allocate benefits pro rata for people who come in to do a day or an hour shift.

The directive also proposes to introduce collective bargaining between unions or professional bodies and employers to determine pay and conditions. Currently, most terms and conditions of employment are agreed between the employers and agencies only.

Employers have also attacked the plan. A spokesperson for the Chartered Institute of Personnel and Development said that ‘Agency workers allow employers to rapidly meet changes in business demands and staffing crises. The EU proposals are wholly inappropriate for the UK. They will restrict flexibility without significant benefit to anybody.’

Trade union groups have welcomed the proposal. A Trade Union Congress spokesman said: ‘Temporary workers in the UK not only face substantial job insecurity but they also often receive far less favourable treatment than those they work alongside.

‘Lack of access to training results in lower skills while lower pay damages the motivation and inevitably leads to lower productivity.’