New regulations regarding the use of temporary and agency workers could add significant extra cost and bureaucracy to meat businesses, producers have warned.

Under a deal brokered by the government, CBI and TUC last week, the UK's one million temporary and agency workers will be entitled to the same pay and conditions as permanent staff after 12 weeks.

Although the agreement has been hailed by the unions as a breakthrough on workers' rights, some employers said it could seriously harm their margins.

The new arrangements would necessitate more time on paperwork and add costs to the business, said Christopher Hardman, managing director of bacon slicer The Bacon Factory in Bury.

"For us, less paperwork means more time spent running the business," he said.

"The extra work and cost would make us rethink using temporary staff. We may as well employ people full time."

Concerns were expressed that employers - in a bid to avoid the additional costs - could attempt to terminate the employment of temporary staff before the 12 weeks were up and then re-employ them as 'new' staff. "There will be an increased cost for meat firms," said Owen Warnock, food sector and HR specialist at international law firm Eversheds. "It will be interesting to see to what extent anti-avoidance measures will be used."

The industry recognised that temporary staff were an asset that needed to be protected, said 2Sisters marketing manager Peter King, but he warned that an extra layer of bureaucracy could "interrupt the market".

The Forum of Private Business said the proposals could make small firms uncompetitive.

"The added costs and red tape could leave many small businesses with serious staffing problems," said FPB chief executive Phil Orford.