A top information technology recruitment firm based in Sussex says new legislation poses a serious threat to the industry.

Legislation aimed at improving flexibility in the workforce and the protection of vulnerable job-seekers has no relevance to the contract IT sector, says Karen Silk, managing director of Capital Software.

She said contract IT professionals are in high demand, command large fees and mostly work through their own limited companies.

"They are already a highly-flexible workforce and can move easily to where their skills are required. The scope of the legislation, therefore, does not apply to this sector of the recruitment market.

"The industry should be made a special case."

The consultation period for the Conduct of Employment Agencies and Employment Businesses Regulations ends on Friday and much lobbying has already taken place by the Recruitment and Employment Confederation and individual agencies to make the case that the contract IT sector, which is important to the Sussex economy, should be exempt from the requirements.

Mrs Silk said: "These regulations are onerous to say the least and could cause considerable problems in this specialist and highly-important sector.

"In fact, rather than increase flexibility, the proposed changes could damage competition and customer choice, and even mean job losses.

"I see no benefit to the sector from these regulations. They try to address problems which simply are not there."

She said the Government's broad sweep approach to the whole of the recruitment industry means inevitably some sectors will suffer.

Wanda Bridge, corporate services manager for Capital said: "This appears to be another case where the Government is keen to be seen taking action by introducing new legislation, rather than understanding the implications fully.

"The devil is in the detail and we need them to understand the implications on the contract IT sector, make it exempt and avoid a potential disaster in a very successful and economically-vital part of the UK economy."

Interested parties need to forward their comments about the proposed legislation to Andrew Cunningham Hughes or Alan Johnson, minister for competitiveness, at the Department for Trade and Industry by Friday.