Youths set a car ablaze, broke a shop window and hurled stones, golf balls and other objects at police at the end of the Paris protest.
Riot police wielding shields and batons rushed the crowds and fired tear gas.
Officials provided no immediate estimate of the number of protesters in Paris, but two unions claimed 400,000 people participated.
For the second time in three days, students - this time joined by unions and employees - demanded that conservative Prime Minister Dominique de Villepin withdraw the proposed New Jobs Contract (CPE) which could take effect in April.
Strikes have already have paralysed 16 universities.
Under the CPE contract, anyone under 26 could be dismissed in the first two years of employment without explanation.
The contract is supposed to encourage employers to take on young staff by removing some of the financial risks involved.
But it has angered many French youths, who see it as a licence for employers to take advantage of young workers, and many older workers who fear for their jobs.
The head of the powerful CGT union, Bernard Thibault, has threatened to call a crippling general strike if the plan is introduced.
The massive Paris protest crawled from the Denfert-Rochereau square in the south to the Place de la Nation in eastern Paris.
After nightfall, protesters pelted police and milled around the streets.
Demonstrations were also other centres throughout France, including Marseille, Lyon, Toulouse and Rennes.