Abstract: Based on the fieldwork studying the process of resolving labor disputes by PS District government in Southern China， this paper presents a concrete case of the implementation of the Labor Contract Law passed in 2008. The author has found that since the Law took effect， the district government has transformed its permissive role toward an intervening one， and that the district government has purposefully lowered the execution standard of the Law to prevent possible social instability. The author argues that the ineffective enforcement of the labor contract system is the result of the interaction among several interlocking social processes， for example， the organizational environments of the local government， changes in the relationships between the district government and the community， the industrial upward transformation， etc. The author’s research shows the importance of the local background， historical processes and concrete institutional conditions in understanding the ongoing social transformation in China.

Key words: labor disputes, organizational environments, social transformation