Waving signs with the characters for 'illegal', workers surrounded the Council of Labour Affairs and shoved shield-bearing riot police, challenging laws allowing companies to require leave amid rising unemployment.

'The economic crisis hurts, unemployment is rising, companies are hurting employees with wage cuts and even forcing unpaid leave, and the Council of Labour Affairs hasn't done a thing to protect workers,' the protesters said in a statement.

In Taiwan, the trend of forcing workers to take leave without pay, euphemistically called 'unpaid vacation' in Chinese, began in the memory chip sector which experienced its worst-ever slump throughout most of 2008.

From there this cost-saving measure has quietly spread to other key sectors such as LCD manufacturing and other chips.

Taiwan's jobless rate rose to 4.62 per cent in November to its highest level in nearly five years, while GDP growth posted its biggest drop in seven years on reduced demand for exports.

The labour department had no comment on the demonstration, which dispersed at around noon local time. -- REUTERS