Close to a third of employers will sack temporary workers to avoid having to pay them at the same level as permanent staff under new European legislation, according to new research.

Under the new EU Agency Worker directive, employers are required to give short-term staff the same rights and pay as permanent staff after 12 weeks in a job.

The survey of recruitment agencies by the Association of Professional Staffing Companies (Apsco) found that 29 per cent are likely to terminate contractors and temporary workers before the trial period is up.

The first job losses are expected this month, after the new rules came into force in October, Apsco said.

"The initial 12-week qualifying period expired at the end of December, so if these concerns are even close to being accurate, we could see tens of thousands of temporary workers jettisoned onto the labour market in January," said Ann Swain, Apsco chief executive.

The majority of workers affected are likely to be young graduates, she added.

"At a time when unemployment among young people has surpassed one million, any barrier to securing work has to be questioned."

The Agency Workers Directive gives agency staff equality with their directly-employed counterparts after an initial 12-week period.

Under the directive, agency workers will receive a pay rise and new rights to holidays, sick pay, maternity leave and access to private health benefits.

Unions have welcomed the move but business group the Confederation of British Industry (CBI) claimed it will prove counter-productive and cost employers an estimated £1.8 billion a year.

"A hard-won 12-week qualification period for each temp to be in a firm before the rules are applied should help control costs and minimise administrative burdens," said its chief policy director Katja Hall.

"But the new rules will still act as a brake on jobs. The government must take the first opportunity to remove unnecessary gold-plating or reform the directive."