Correctional Services spokesman Manelisi Wolela has denied allegations that student leader Mcebo Dla.
COSATU has given Sun International until today to fire the security company accused of insulting Nelson Mandela.
They have also called on institutions in the province who are doing business with Falcon Security to terminate such contracts.
The labour federation has also threatened to lobby 2010 World Cup tourists and Fifa officials not to stay at Sun City during next year's soccer spectacle.
"We will not compromise when it comes to Nelson Mandela. We want Sun International to resolve this by Monday," said Cosatu North West spokesperson Solly Phetoe.
Cosatu members marched on Sun City and delivered a memorandum to management on Saturday.
This comes after security boss Ben Burger was arrested after a remixed national anthem was played at a staff function last week.
The song was said to have ridiculed former president Nelson Mandela, calling him a "kaffir".
Burger was charged with crimen injuria and is out on R1500 bail.
He is due to appear in court again at the end of the month.
The hotel's security manager, Warren Alberts, was also suspended, while his colleague, Francois Roberts, was fired for actually playing the offensive CD.
Another racist incident involved Marietta le Roux, who is accused of calling employee George Moapaletsela a "baboon".
Moapaletsela told Sowetan that it started when Le Roux entered a room he was in at work earlier this year.
"She looked me in the eyes and said she could smell baboon. I was devastated," Moapaletsela said.
He said he had laid a charge against Le Roux with human resources and the union.
Another employee, Kagiso Mafilika, said her two-year-old son was sprayed with cold water on a winter's day by the resort's emergency workers.
She said: "I had taken him to work that day because his nanny was sick. Later I heard him screaming outside. When I went to investigate, I found him trembling and soaked."
Sun International director of resorts Kurt Peter said though Cosatu's deadline was tight, they would engage the labour federation.