COSATU is set to spend millions of rands buying houses and furniture for four of its national office bearers.
An internal Cosatu document, leaked to Sowetan, shows the federation will spend up to R850000 on each house.
There are now fears that unions will have to foot the bill so that Cosatu leaders' families can live in these upmarket residences.
Cosatu president Sidumo Dlamini, first deputy president Tyotyo James, second deputy president Zingiswa Losi and treasurer Freda Oosthuysen will also be given a grocery allowance of R3500 a month each "because they live outside Johannesburg".
Cosatu general secretary Zwelinzima Vavi and deputy secretary Bheki Ntshalintshali will not benefit from the new policy because they are full-time Cosatu officials.
"The federation should buy the houses outright. These must be between R620000 and R850000," the internal document says.
"They will be fully furnished clustered houses in a complex with security and a caretaker."
The houses will be chosen based on "privacy for individual national office bearers and can accommodate access by family members", the document says.
But a unionist who spoke to Sowetan on condition of anonymity said: "While Cosatu calls for lifestyle audits, fights corruption and calls on members to go back to the townships to service schools, its leaders move into suburbs at members' expense.
"They will now live a very comfortable life far removed from that of most Cosatu members who struggle to earn R3500 a month."
But Vavi told Sowetan: "We are now spending way above that on flights and hotel accommodation for office bearers based in Cape Town, Port Elizabeth, Bloemfontein and Durban.
"We are not buying houses for them - the houses will remain Cosatu property."
Vavi said the office bearers work in factories and earn "factory salaries".
It would be unfair to expect them to buy their own groceries as well as groceries for their families at home, he said.