"It is obvious that the post-Polokwane administration has spectacularly failed to reverse the crisis of unemployment," Vavi said in a speech at the memorial service of former Numsa president, Mthuthuzeli Tom.
The service took place at the Numsa special national congress at the Birchwood Hotel in Boksburg.
"It is also obvious that this administration has failed to deliver on one of the basic promises of the 52nd Conference of the ANC, which was to create decent work."
Vavi said he was speaking as someone who knew Tom and not as the suspended general secretary of the Cosatu.
Tom, he said, would have urged the National Union of Metalworkers SA (Numsa) to play a leading role in ensuring that South Africa did not end up as a "predator state".
The alliance was at a crossroads.
"The status quo in the alliance is not politically sustainable. We need the ANC to move into a new direction... an uninterrupted struggle to build a truly united, democratic, non-racial, non sexist and prosperous South Africa.
"There is an urgent need for a radical shift to the left, on to a path to economic and social emancipation for the poor majority who have not benefited economically from the first 19 years of our freedom," said Vavi.
Changes
The ANC must change course and demonstrate that it was committed to radical economic transformation.
Vavi said unless drastic changes were effected, the liberation movement ran the risk of falling out of favour with the majority of the working class.
"The biggest challenge facing the ANC and the rest of the democratic forces is not a lack of ideas but our failure to implement what has been agreed to and to have the political will to implement what we know is politically and morally correct."
Vavi said Tom would have been "extremely concerned" about the state of the trade union movement.
"He would be shocked at how leaders have abandoned the interests of members to pursue anyone threatening their narrow interests - interests that can be best served if the status quo is maintained," Vavi said.
Tom would have been worried that some workers had turned their backs on unions and were taking their own initiative to represent themselves, leading to massive instability in many workplaces.
Vavi said the economic crises from 2008 caused the country some problems but it did not have the answers to the "unfolding catastrophe".
Government policies
The government had continued with inappropriate neoliberal policies, notwithstanding the 52nd ANC policy package that promised that all policies would centre on the need to create decent jobs as the deliberate policy choice to attack poverty and inequalities, he said.
"These failures have occurred within the context where Cosatu proposals have been ignored and the alliance is practically dysfunctional," Vavi said.
Vavi said there were positive achievements since the advent of democracy - workers had enjoyed a range of constitutional guarantees such as the right to fair labour practice, to form and join unions, strike and picket, and the right to collective bargaining.
He said more people had access to electricity, sanitation services, housing and other social needs, and despite the problems with the quality of services and two-tier education system, access to education had increased.
"These are strides and marks of progress we must celebrate, as they are products of our strife and determination," said Vavi.
"But comrades, we have to be more frank in declaring that democracy has so far benefited the previous ruling classes more than it has benefited the primary motive forces of the liberation struggle."
Vavi said that in 1995 youth unemployment stood at 38%, in 2005 it was 45% but now sat at 55%, while total unemployment was 31% in 1995, and was now 37%.
Inequality
To translate the levels of inequality to practical figures - each of the 20 highest paid directors in Johannesburg Stock Exchange-listed companies earned 1 728 times the average income of a South African worker.
He said agricultural land-ownership also remained concentrated and colonial. And to make matters worse, it was estimated that more than 70% of redistributed land became unproductive after the reform process, due to the absence of post-redistribution support.
"It is no wonder that South Africa is failing to even get out of racism," he added.
There was rampant corruption which had made all the above problems even worse.
With corruption, Vavi said, the elite in society stole from the poor. Corruption had become endemic in the country.
This, Vavi said, was becoming a matter of life and death, literally and metaphorically, because people were being intimidated or killed for exposing or preventing corruption.
South Africa might face a "nightmare future" where the country was up for auction to the highest bidder and a society where no one would be able to do business without going through "corrupt gatekeepers".
Factions were formed around access to government power, bringing leaders closer to state tenders, and not around ideologies or political views, said Vavi.
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