More than 500 workers of a leading toy producer in Dongguan, in south China's Guangdong Province, smashed police vehicles and company offices on Tuesday night in a labor dispute, police and witnesses said.

Most of the workers had been told by their employer, Kaida Toy Corp. Ltd. in Zhongtang Township, that it would terminate their contracts with an average compensation of one month's wages. That would be less than 1,000 yuan (about 143 U.S. dollars) for most workers, a protesting worker told Xinhua early on Wednesday.

At least 80 workers, having worked for nearly 10 years at the company, were unhappy with the arrangement and demanded more compensation, he said.

"They rallied at the company's gate late Tuesday afternoon and were soon joined by their co-workers," said a witness on condition of anonymity.

About 1,000 police and security guards were called in to disperse the crowd. This infuriated the protestors, who overturned a police vehicle, smashed at least four police motorbikes and broke windows and computers in the company's office building, said the witness and a spokesman with the township public security bureau.

Witnesses said at least five workers were injured. This figure has not been confirmed by police.

The violence had stopped by Wednesday morning but dozens of workers remained at the facility demanding compensation, Xinhua reporters at the site reported.

The company's managers fled their offices on Tuesday night and as of 10 a.m. Wednesday, no one was available for comment.

The workers claimed their employer, a Hong Kong-invested firm that produces toys for several major international brands, was trying to evade its obligations under China's labor contract law, which came into effect early this year.

The new law requires employers to sign unlimited-term contracts with employees who have worked for more than 10 years. Some employers, however, believe such contracts will be a burden.

Liu Xiyuan from the central province of Hunan, who has been working at Kaida for 21 years, said he turned down compensation equivalent to eight months' wages when his contract expired on Nov. 19. "If I had accepted the compensation, it would have meant all my 21 years of work wouldn't count," said Liu, 45.

One worker, who refused to give his name, said he accepted 4,000 yuan in compensation to have his seven years of work written off.

Kaida, which employs 8,000 people, terminated contracts with 380 workers on Nov. 19. Another 216 contracts were scheduled to be terminated on Wednesday.

(Xinhua News Agency November 26, 2008)