I am a H1b visa holder and my company has applied for my labor. However, labor will not clear before the h1 expiration date of 01 Dec 09. Is it possible to change my status from H1 to F1, will it harm the GC process.

No employment authorization with and F-1 and the status does not allow dual intent, problematic with the LC filed on your behalf.

If your employer filed the LC prior to the end of your fifth year of H eligibility, they can file for 7th year extensions in one year increments.