In what has been called a "death knell" for Cosatu, the 230,000-strong Public Sector Association (PSA) has joined the Federation of Unions of South Africa (Fedusa), Business Day reported, bringing Fedusa's membership to 700,000.
With government employees' salary negotiations set to begin later in 2017, the move could be a game changer at the Public Service Co-ordinated Bargaining Council (PSCBC) where negotiations take place.
This means Cosatu will no longer be the biggest player at the PSCBC.
Fedusa general secretary Dennis George told Business Day that Fedusa would now bring together a majority of the 1,3 million workers in the public sector ahead of the negotiations.
"The timing of this is important because we've been downgraded to junk status no and that is going to put a huge amount of pressure on all working people, while the state is going to face a huge amount of pressure because the working people have been carrying a heavy burden of paying tax in this country," George told the paper.
Labour analyst Mamokgethi Molopyane called the move a death blow for Cosatu.
"It could therefore render Cosatu insignificant and no longer an influential player," she said.
She said the development was good news for workers, as it meant "... you are going to have to earn your workers ... because we [the federations] are not going to let go of our workers so easily...".
George reportedly said: "We also want to see to it that workers feel protected and stand up against rogue politicians who want to force them to doing things not required from public service. Cosatu likes to sometimes create the impression that they can get better deals through their affiliation with the ANC, and they can persuade ministers to do this and that, but we know this does not happen."