Temporary workers could lose out because of new EU legislation, according to the Engineering Employers' Federation Yorkshire and Humberside.

The organisation said a draft directive, which aims to give temporary staff the same rights as full-time employees, will add an extra £500 million a year to the UK wage bill.

Ian Hughes, regional director of the EEF, said: "The position may well be quite different in other EU countries, but here in Britain many temporary workers actually choose to do temporary work for a number of reasons, including the desire not to be tied to a particular job at a particular company." He said the rise in costs to firms would "inevitably cause a sharp reduction in the numbers of temps used".

The EEF has urged the Government to modify the rules, or risk "undermining the flexibility of the labour market". Mr Hughes added: "I am hopeful that they will be able to include some modifying conditions, such as a proviso that the equal treatment will only come in after a temporary worker has been employed at a company for 12 months."

But the boss of a Bradford recruitment firm disagrees. Steven Street, managing director of Relay Recruitment, of Salem Street, said: "I've never been persuaded by the notion that temporary workers, save for students working their holidays, choose to carry out temporary work.

"Of course there are exceptions however, in my experience 95 per cent of temporary workers would, given the opportunity take up quality permanent work."

He said new rules while new rules would drive up costs, they would bring benefits. "But my view is that a rise in costs should be tempered by the additional leverage gained with this increased mutuality of obligation in that if business is obliged to extend additional rights and protection to a group of workers that previously fell outside legislation, then expectation of these workers increases," he said.

"Attendance, time-keeping, productivity and flexibility would become pre-requisites for any worker expecting secure employment."