The proposed AWD seeks to give temporary workers and contractors rights to the same pay, pensions, holiday cover, health insurance, interest free loans, share schemes and other benefits as long-term employees doing comparable jobs.
People who work through agencies are currently only legally entitled to a minimum wage and a holiday allowance.
Having welcomed the proposals, the T&G accused the CBI of 'overreacting' in its rejection of the AWD and said the CBI's claim that hundreds of thousands of jobs would be lost as a result of its introduction were 'baseless.'
The CBI recently undertook a survey of temporary workers which it says found 160,000 employment opportunities a year could be lost under the AWD.
It said the EU directive on temporary agency work would cause 57 per cent of firms to offer fewer 'temp' assignments. It is consequently urging trade unions not to campaign for harmonisation of EU employment law.
The CBI estimates the resulting administrative burden of the AWD would cause: 10 per cent of firms to stop using temps, with the loss of some 12,000 assignments; 32 per cent to reduce agency work significantly, cutting up to 150,000 assignments; and,
a further 135,000 assignments to be at risk with 16 per cent of firms making small reductions.
John Cridland, CBI Deputy Director-General, pointed out the UK has around 770,000 agency workers, more than any other EU country.
He said: "These proposals would deliver a serious blow to the UK. The CBI supports minimum standards for agency workers, but it is unreasonable to expect the host business to set pay levels as this is a matter for agencies. Fifty nine per cent of businesses are unprepared to be involved in doing this."
Until now UK temporary workers had no legal rights to sick pay, holiday pay, pensions or maternity pay, and were often not as well paid as their permanent counterparts. A survey by the Trades Union Congress in 2001 found that 25 per cent of workplaces surveyed were not paying sick pay to temps, and 14 per cent paid no holiday pay.
Len McCluskey, T&G National Secretary, said: "Entitlement to basic benefits like sick pay and holiday pay should not depend on whether you are on a temporary or permanent contract. Why should temps lose money if they are ill, or need time off?
"Temporary workers make up an important part of the British economy, and should have the same rights as permanent employees. The CBI has completely overreacted by claiming that hundreds of thousands of jobs will be lost. Workplaces in the UK will be better off as a result of these plans."
Following the T&G's remarks, the CBI told Shout99.com: "Our survey shows employers themselves saying how they believe they would be affected by this directive. Their responses show that up to 160,000 employment opportunities could be lost each year.
"The big losers will be the army of people for whom this work will not be available."
Philip Ross, PCG Policy Advisor, said: "Contractors don't want to get caught up in this legislation as it could, potentially, become a barrier to trade. They are professional, highly-skilled business operators and not temporary workers, the only similarity between them is their use of agencies to find work."
Richard Powell, © Shout99.com 2002