Business leaders in Kent say new rules to improve temporary and agency workers’ pay and rights may lead to fewer being kept on beyond 12 weeks.

The Government has agreed a deal with the CBI employers’ organisation and the Trades Union Congress which will see agency workers in the UK receive equal working and employment conditions after 12 weeks.

But some fear the new rules will backfire, if firms are reluctant to retain workers past the three-month deadline.

Gerry Cassell, managing director of Sittingbourne-based recruitment agency New Appointments Group, said: "There has been no proper consultation with the business sector. There has been consultation with the CBI, but that doesn’t represent the employment agency sector.

"We have not seen the detail but I am quite sure that it has not been properly thought through.

"After the 12 weeks the agency will be required to pay (the worker) the same rate of pay that exists in the client company’s site.

"We would then have to add our margin to the rate of pay, which would make it uneconomic for the employer.

"In reality the net effect is that employers will only use temporary workers for up to 12 weeks.

"What the Government has utterly failed to recognise is the economic value of temporary workers to business. I think the Government is in a state of panic. They are looking for anything they think can win them points.

"This is another hurdle that the sector has to go through."

Roger House, Kent chairman of the Federation of Small Businesses said companies faced with extra costs after 12 weeks would ask themselves; ‘What is the point of having temporary staff?’

He said: "What it is really doing is removing the ability to determine what you as a business want and need. For the business owner it is taking away flexibility and your freedom to run your business as you think best."

The CBI employers’ organisation has described the deal as "the least worst outcome available" as it will ease pressure from Brussels to alter temporary workers’ status still further.

Malcolm Hyde, regional director for the CBI said statistics showed that half of temporary staff were employed for less than 12 weeks anyway.

He said: "This has been under negotiation for years. It will have an impact, but it is a question of managing those costs."

The Government said the new arrangements would be reviewed once they had had time to take effect.