Two-thirds of employers will use fewer or NO agency workers under proposed EU directive

Almost two-thirds of employers will use fewer agency workers, or none at all, if a European directive to give them better rights is introduced, they warn.

Under proposals from Brussels, agency workers would get the same pay, hours and holiday rights as full-time workers after 12 weeks with a company.

Other staff benefits, such as pensions, private medical insurance and sick pay, would not be included.

But increasing the rights of agency employees could dampen firms' desire to employ them, as they fear these workers will become more expensive, research from the law firm Eversheds warns.

About three- quarters of employers said they 'believe that agency workers should not be able to receive the same rights as full-time staff after 12 weeks' service'.

Martin Warren, head of employment law at Eversheds, said: 'These findings show that there are some strong feelings about the proposed legislation among UK employers.

'However, it is important to note that employers are still waiting for the detail on how the directive will impact in practice and therefore there are currently many unanswered questions on the issue.'

Britain blocked the EU vote for many years, but caved in this year in return for keeping its ability to opt-out of the 48-hour week.

However, it did negotiate the 12- week qualifying period before agency workers get the improved rights, compared to six weeks for the rest of Europe.

The deal, expected to come into force here in 2010, was agreed between the CBI business lobby group, the Trades Union Congress and the Government.

Neil Carberry, head of employment policy at the CBI, said: 'We are by no means saying that it is a good thing. It is the least worst available option.'

This is because about 50 per cent of agency contracts last for fewer than 12 weeks.

Agency workers are useful to business because they can be hired for a day, a week or a year.

They are typically employed to cover for a 'season surge', such as fruit picking in the summer or the implementation of a new computer system.

Often, they are hired by firms testing demand for a new product.

But businesses believe that giving agency workers better rights will end the flexibility that usually accompanies their employment.

Most employers are worried that an increase in paperwork and administration will force costs to rise by up to a quarter, the research shows.

Many bosses say they would restructure their workforce to avoid the need to hire any agency workers in the future.

At present, agency workers account for up to 50 per cent of some firms' workforce. On average, the figure is more like 5 per cent to 25 per cent.

There are thought to be between 250,000 and a million agency workers in Britain.

Many are parents who only want to work during the term-time, so instruct their agency only to find them work then.

Fat cats get the cream in pension payouts

The bosses of our biggest companies have average pension pots of £3million, research shows.

This means they can look forward to retiring on more than £200,000 a year, the Trades Union Congress said.

By contrast, their employees will see average pension payouts of about £8,100 a year.

And while directors normally retire at 60, the average employee's company payout is so small, they face working until the state pension kicks in. For those born after 1978, that might only come at 68. The research looked at the pensions of 346 directors from 102 of our biggest private-sector firms. Most are in the FTSE 100.

Brendan Barber, of the TUC , said: 'As ordinary workers have their pension schemes closed and are expected to work for longer, the UK's top bosses are avoiding this collective belt tightening.'