Bowing to union pressure and creating ever more new employment rights would be disastrous for the British economy, the Confederation of British Industry has said.
Director-general Digby Jones warned trade and industry secretary Alan Johnson, speaking at the TUC Congress, that the UK's economic success could be undermined if the Government implements the kind of employment legislation that unions believe they have been promised under the terms of the so-called "Warwick agreement".
This agreement, said the CBI, included commitments to introduce new laws or consult in areas including supporting the proposed European Union directive on agency temps, extending the scope of collective bargaining, increasing statutory redundancy pay and creating a new employment rights agency similar to the Health & Safety Executive.
"Doubling statutory redundancy pay, for example, would hit small firms hard. And introducing equal conditions for temporary workers after only six weeks would undermine the flexible labour market that has helped the UK economy to out-perform its European neighbours," warned Jones.
"Since 1997 companies have absorbed a series of new employment rights in a constructive and forward-looking way. But the government's commitment to better regulation and a competitive economy will not sit well with pledges at the TUC to deliver ever more employment rights," he added.
He also called on the government to do more to tackle public sector pensions. "The government must stand up to the unions and deliver equivalent structural reform to public sector pensions. Taxpayers - businesses and individuals alike - expect no less," he said.
The British Chambers of Commerce, meanwhile, expressed "disappointment" that the Government did not make "a clear, unequivocal pledge" to raise the public sector pension age to 65.
"It is vital that the public sector pension age is increased. This will bring those workers into line with their private sector counterparts," said director general David Frost.
"In addition, failure to take such action would see pensions costs growing even larger, placing yet more strain on business that has to fund this bill," he added.