The logic of the proposal seems to be checking for intercept first, then checking dueling levels, not the other way round:
The Interception
The more labour points you have, the higher chance the guard has of intercepting a duel , at a rating of 1% per excess labor point .
The skill 'Hiding' will reduce the chance of being intercepted. Each skill point in hiding would reduce the chance of interception by 5% .
DUELLER A comes to town, queues up a duel against WORKER A. The normal duelling procedure follows. However, in the background, it works out (using GUARD A's percentage of interception after taking off DUELLER A's hiding deduction) if he get's intercepted. If the duelling levels do not correspond with the limits already imposed in the game, then there is no chance of interception. Then one of two things happen:
1) DUELLER A is not intercepted. The intended duel with WORKER A goes ahead as normal. The normal motivation and energy cost is spent. OR:
2) DUELLER A is intercepted. In effect the guard has instigated a duel with the dueller. This costs the guard the usual duel motivation and energy but does not cost the dueller any. Then one of two things happen again: The duel happens instantly, the dueller does not have the option to cancel.
2a) GUARD A wins the duel. The defeated DUELLER A is unable to attack either GUARD A or WORKER A within the next hour. He is free to attack other members as usual.
2b) DUELLER A wins the duel. He gains the usual XP and any money (if the guard is silly enough to have some on him). He then duels WORKER A in the usual manner with a ten minute delay as normal. This duel costs him NO motivation and energy and is played as usual. He has the option to cancel this duel if s/he wishes
Do you see what I am saying? I'm not saying no to all duels or trying to totally choke off duelers, but to make this a workable proposition you need to think about how this job will be seen from the guard's perspective. If you've got a level 10 wet-behind-the-ears dueler, and he comes to town to try and get experience (and money) off the town's level 20 workers, then why can't the level 25 soldier who is patrolling the town run them off if he spots them? It's what the town is paying him to do, after all. I'm not saying that there has to be a duel willy-nilly, but there should be a duel with the guard instead of the challenged party regardless of level disparities.
Maybe what there should be is a dialogue for the dueler: "You have been spotted by the town guard [insert player link]. To get to your original target, you must knock him out first. Do you wish to challenge him or have a quiet drink in the saloon before leaving town? [Challenge Rival] [Leave Town]"
That makes it a bit more tactical - the dueler will have to choose his target carefully in the first place, balancing the possibility that the high level soldier hanging around town is actually on guard duty not sleeping or going after a town with no soldier about...
The other possibility to to make it that the guard job allows the guard to only protect a certain number of players - for every 10 labour points, he can protect 1 townsman. Either way, I suspect that the guard town job will have to wait for the sheriff to be implemented; until we know how that is going to work, I doubt that anything will be done.