Government proposals to separate Bank Holidays from annual leave, increasing holiday entitlement to 28 days, could add to the woes faced by temp agencies.

If, as expected, the European Court of Justice rules against rolled-up holiday pay, this will push up the cost of temps.

Iain Sutherland, of accountancy group 3 sixty group, said: “Europe is trying to encourage people to take rest breaks and the trade unions have jumped on the bandwagon