Plans to extend the rights of agency workers will ‘hinder’ British business and lead to significant job losses, according to leading business groups.

Last week MPs gave their backing to the Temporary and Agency Worker (Equal Treatment) Private Members Bill, put forward Andrew Miller MP.

However, the move has led heavyweight business groups to unite in protest over the proposed extensions to the law on temporary workers.

Although Miller has claimed there is both a ‘moral’ and ‘economic’ case for the Bill, the Confederation of British Industry (CBI) has warned that the changes would ‘bypass’ the vulnerable staff it seeks to protect and deter businesses from hiring temporary workers.

The CBI estimates that around 250,000 temporary placements may be lost if the Bill becomes law.

The British Chambers of Commerce (BCC), Institute of Directors (IoD) and Federation of Small Businesses (FSB) have also voiced their concerns on the issue.

‘This Bill is based on the naive, and somewhat patronising, assumption that ‘one size fits all,’ said Andrew Cave, deputy head of public affairs at the FSB.

He added: ‘For small businesses, temporary agency workers provide the flexibility that allows them to survive, grow and innovate.

‘It is this flexibility that keeps the UK economy responsive to change, whilst at the same time offering an excellent entry point into the jobs market’.