Myanmar police on Wednesday arrested dozens of activists and factory workers as they broke up a labour rights march on the capital, the latest rally to test freedoms under Aung San Suu Kyi's new civilian government.

Around 200 police moved in on the demonstrators, many wearing bamboo hats and waving banners calling for worker rights, as they entered the outskirts of Naypyidaw -- where they hoped to speak to the government.

"We arrested about 60 protesters today. We tried to do it without hurting anyone," Naypyidaw region police chief KoKo Aung told AFP.

"We will not take further action against all of them, just those trying to cause violence," he said.

Suu Kyi's party is stacked with former dissidents who served prison time for their opposition to Myanmar's military governments during decades of repressive rule.

Since taking the helm following a landslide November election victory, the administration has freed scores of activists and political prisoners and signalled its determination to repeal oppressive laws.

But police have launched legal action against activists involved in several recent demonstrations, and rights groups have expressed concern over efforts to amend draconian protest laws.

The protesters in Naypyidaw have been marching for about three weeks from northern Sagaing Region, where around 100 workers have recently been fired from a timber factory.

They are appealing to the government to help reinstate many of those jobs and to recognise their newly-formed employment union.

The demonstrators were met by a wall of security forces as they tried to enter the capital and after a brief stand-off, officers began rounding up demonstrators, which led to scuffles.

"We didn't do anything wrong by protesting. Arresting us is unfair," one of the activists called out to reporters as she was arrested.

Earlier this week police announced plans to take action against five leaders of an interfaith rally in Yangon because the campaigners had deviated from the agreed protest route.

Yangon police have also begun legal action against seven leaders of an unauthorised protest by Buddhist nationalists outside the US embassy last month.

Rights groups have raised alarm bells over a number of provisions in a draft amendment to the Peaceful Assembly Act that is due to be debated in parliament in the coming days.

They fear these will continue to penalise non-violent demonstrations, albeit with shorter jail terms.

The proposed draft would mean protesters must still give local police 48 hours' notice of the place and time of any rally, as well as details of planned speeches and slogans.

Those who protest without giving prior notice could be imprisoned for three months, while repeat offenders could face a year behind bars.

© AFP