A large posse of police personnel intercepted the employees near Lal Chowk in the heart of the city, less than a few hundred meters from the Secretariat, the administrative headquarters of the state government.
Police used batons and coloured water cannons to stop the protesting employees and later bundled them into police vehicles.
"We have detained 55 employees, including (their leaders) Abdul Qayoom and Javed Trali," SDPO Shaheed Gunj, Imtiyaz Ismail, said.
The employees, whose agitation entered the second day today, are demanding extension of the retirement age to 60 from the existing 58 years, apart from regularisation of daily-wagers and removal of pay anomalies in the clerical cadre.
Last week, the Joint Consultative Committee (JCC) - a body of several employees' unions which is spearheading the agitation - announced a four-day protest beginning yesterday to press for its demands.
JCC has called for a complete pen-down strike on June 16 and a march to the Governor's House the same day.