New EU regulations on workers’ rights could spell the end of agency labour in the construction industry, experts are warning

The government has consulted UK industry bodies about the Agency Workers Directive, which must be implemented in all EU member states by 5 December 2011. Under the rules, companies would have to give agency workers the rights of permanent staff after 12 weeks.

Edward Goodwyn, a partner in lawyer Pinsent Masons, said the rule change could fundamentally alter the nature of the construction workforce.

He said: “There will be little reason to use agency staff if you are going to be taxed in the same way as for your direct recruits and have to give the same benefits.

He added: “The change has significant cost implications. It will add a lot of red tape.”

The Recruitment and Employment Confederation said employers needed flexible staffing solutions in these difficult times, and that the financial burden of instating the system would result in more unemployment.

The consultation on implementing the directive closed on 31 July.

The UK government is also looking to force through a plan to make employers put contract staff on payroll.