Government plans to give agency workers similar rights to full-time employees after just 12 weeks will be "disastrous" for small firms, one industry body has warned.

According to Tina Sommer, EU and international affairs chairman for the Federation of Small Businesses (FSB), the proposed measures will mean that temporary workers are no longer a flexible solution for small companies, meaning they might stop using them all together.

She said: "Part of the reason for the UK's relative economic success in the past decade has been the flexibility of its workforce. This deal could put all that at risk at the worst possible time."

Increasing unemployment and slowing economic growth mean that such regulation is "the last thing that small businesses need", she added.

Meanwhile, the British Chambers of Commerce has welcomed an announcement by John Hutton, secretary of state for Business, Enterprise and Regulatory Reform, who has suggested that the government is not looking to introduce any more employment laws.

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