The day of protest -- which led to scores of arrests as youths and police clashed in Paris, Lyon and Nantes -- marked the fourth such test of strength in a month for President Francois Hollande.
He has been plagued by low popularity and a jobless rate that is stuck stubbornly above 10 per cent little more than a year before a presidential election.
Organizers said more than 1.2 million people took part. The interior ministry put the number at just under 400,000, higher numbers -- despite persistent rain -- than in some other recent protests.
The three protests to date had been relatively low-key, but with rail, air traffic and utility staff among those to stop work, there was significant disruption across the country.
On Thursday, Reuters TV footage showed hooded youths in Paris jumping on cars, taunting police and throwing projectiles, prompting riot police to charge some groups. Reuters reporters also witnessed clashes in France's second city Lyon and in Nantes.
Police arrested more than 100 people and at least 13 officers were injured, the interior ministry said.
Unions said they planned further rallies on April 5 and 9 with the hardline CGT union saying the protests would not end until the draft labour bill was withdrawn entirely.
"Small employees are treated like dirt, we've had enough, (and) it's Hollande who pretends to represent the left," said Jean-Luc Gutel, a CGT representative who works in the delivery service in Paris.
"The youth are told to study for years, but what for?"
State railway SNCF said stoppages among its staff had cut some services by 40 to 50 per cent on Thursday. About one in five flights were canceled at Orly airport south of Paris, the DGAC air transport authority said.
French utility EDF said power output at several production units was cut after nearly 14 per cent of its staff joined rallies.
Under rainy skies, secondary-level school pupils also mobilized in dozens of cities alongside labour unions.
At issue is a proposed overhaul of France's labour code, a set of regulations bosses claim deters recruitment. Critics say the reforms will lead to worse working conditions and more sackings.
The reforms, due to be debated in parliament next week, would give employers more flexibility to agree in-house deals with employees on working time.
After Communist lawmakers brandished signs in the Senate demanding the withdrawal of the text, Prime Minister Manuel Valls said many had a "distorted" view of the reform.
"We have already lifted a number of concerns," he said. "The door remains open ... to work this out for companies, workers and the youth of this country."
The protests come a day after Hollande, who has said he will not run for re-election if he fails to make a dent in the jobless rate, abandoned another piece of legislation - plans to strip convicted terrorists of French citizenship.
That climbdown was forced on him by other lawmakers, many of them in his own camp.
Hollande's government watered down the initial labour reform proposal shortly before it was unveiled this month by ditching a clause that would have capped severance pay awards.
Economists fault the French system for creating a divide between older people with open-ended work contracts and first-timers condemned to move between short-term jobs.