A deep misunderstanding of the role of recruitment agencies, which saw the sector ranked alongside modern slavery during the discussions, has been blamed for its exclusion from the controversial EU Services Directive.

A key vote at the European Parliament in Strasbourg saw the recruitment industry excluded from the proposed directive, which is designed to open up services across the European Union (EU).

The directive is being developed to make it easier for organisations to set up in other EU countries through a single point of contact.

The Recruitment and Employment Confederation (REC) has vowed to continue the fight before the directive reaches the second reading at the European Commission.

External relations manager Anne Fairweather says the ruling is based on a lack of understanding about the recruitment industry and what it could offer.

“Our main concern is the perception of the industry. We believe a lot of the lobbying against this was based on a false position. There's no real understanding about what recruitment agencies do,” she said.

“Hopefully we can raise awareness and get a more orderly debate next time. We see this as a real missed opportunity. Including recruitment in the process would lead to a more sensible system of managed migration across Europe.”

Fairweather is confident that including recruitment agencies in the directive would help create jobs and improve worker mobility across the continent.

It would also help smaller recruiters gain access to other EU markets, currently out of their reach because of complex rules in each separate state.

The Association of Technology Staffing Companies is also concerned by the negative lobbying by trade unions which played on fears that jobs markets could be swamped with cheap labour from Eastern Europe.