Armed police were called to a benefits office yesterday after a man in an "agitated state" began brandishing kitchen knives.
The 28-year-old man became abusive towards staff at the JobCentre Plus offices in Stockton before he pulled out the knives.
Armed response units from Cleveland police arrived shortly before 11am and arrested him.
The incident has prompted unions to call again for better protection for their staff.
The man, who is thought to have returned to the centre, in Daryl House, after he was initially refused a crisis loan.
Workers at the Stockton office were among 2,000 staff across the North-East who took part in walkouts three years ago in protest over the removal of safety screens.
Staff said the removal of the screens from the new open plan JobCentre Plus offices left them at risk from abusive and violent claimants.
The Stockton office was converted to a JobCentre Plus just over a year ago and this is thought to be the first serious incident at the site since the screens came down.
A spokesman for the Public and Commercial Services Union (PCS), which represents majority of job centre staff, said: "The idea of the new open plan offices was to provide a more welcoming environment and whilst we applaud that, it needs to be balanced with the fact that staff cuts have led to longer waiting times, which has frequently led to tempers among customers becoming frayed."
However the Department for Work and Pensions insisted adequate security measures were already in place to protect staff.
A spokeswoman said: "There are two full-time security staff at this site trained to deal with incidents of this nature."
Cleveland Police confirmed a 28-year-old man was helping them with their inquiries.
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