A Nokia mobile phone lies on a tablet computer showing logos of Microsoft, in this illustration picture taken in Frankfurt, November 18, 2013. REUTERS/Kai Pfaffenbach

By James Pomfret

DONGGUAN, China (Reuters) - Hundreds of workers shouted slogans on Wednesday outside a Nokia factory in southern China to protest against what they called unfair compensation after the company sold its mobile telephones business to Microsoft Corp .

Lack of trust in employers has often led Chinese workers to balk at takeovers they fear will harm employment conditions.

Workers massed outside the factory gates in the industrial city of Dongguan said they were battling new contracts worsening employment terms that they had been forced to sign after the U.S. software giant bought Nokia's unit in a September deal.

"We will definitely continue to fight until we get what's fair," said a young male worker wearing a checked shirt, who gave only his surname, Zhang.

Local riot police beat up four workers on Wednesday morning and took them away, several witnesses told Reuters.

About 30 police officers kept watch as workers clad in white Nokia uniforms held up banners with the slogans "Legally protect our rights" and "Demand fair compensation."

Nokia is continuing to talk to the protesters, the Finland-based company told Reuters in an e-mailed statement.

"Our manufacturing operations in Dongguan continue," it said. "To accommodate the temporary situation, we have also adjusted our operations in other manufacturing facilities."

But six protesters interviewed by Reuters said they had not heard from management at all.

"They haven't shown any sincerity in talking to us, and they won't do anything until things reach a critical stage," said one worker, who gave only his surname, Yang, and said he had worked at the factory for two years.

Nokia balked at what it saw as a demand for severance packages to workers who would not be fired, said an industry source with direct knowledge of the protest, who asked not to be named to avoid inflaming the situation.

"A small group of employees is taking this as an opportunity to demand severance packages despite the fact that their jobs will continue," the source said, adding that he did not expect lay-offs as a result of the deal with Microsoft.

The protesters represent just a few hundred of the 5,000 workers in the Dongguan factory, the industry source said.

Factory workers interviewed by Reuters said the Microsoft deal affected the compensation of thousands of workers, a claim the industry source characterised as untrue. Nokia declined to elaborate on its statement.

Nokia agreed in September to sell its devices and services business and license its patents to Microsoft after failing to recover from a late start in smartphones.

The sale is set to close in the first quarter of next year, after regulatory approvals.

Recent industrial unrest at the China units of foreign firms has ranged from strikes to hostage-taking.

In July, workers at a joint venture of U.S.-based Cooper Tire & Rubber Co and state-owned tyremaker Chengshan Group went on strike after Cooper agreed to be bought by an Indian firm.

Protesters said they doubted the ability of Indian tyremaker Apollo Tyres Ltd. to bail out Cooper's debts, and Chengshan eventually asked to dissolve the partnership.

In June, an American factory boss was held hostage in a Beijing plant for days by dozens of employees demanding severance packages.

(Writing and additional reporting by Megha Rajagopalan; Additional reporting by Li Hui and Beijing Newsroom; Editing by Clarence Fernandez)