Labour and Social Protection Cabinet Secretary, CS Alfred Mutua has defended the government’s decision to lay off workers in State-owned sugar companies, describing the move as a lawful and necessary step toward revitalising the struggling sector.
Appearing before the Senate on Wednesday, Mutua told lawmakers that the restructuring was guided by a Memorandum of Understanding (MoU) signed on May 7, 2025, between the Ministry of Agriculture, the Kenya Sugar Board, and the National Treasury. The MoU, he said, ensures transparency, fairness, and compliance with labour laws.
“The ongoing restructuring process in State-owned industries is part of comprehensive reform programmes aimed at restoring efficiency, financial sustainability, and competitiveness,” Mutua said. “This process balances economic necessity with human dignity, ensuring no worker is left without lawful compensation.”
The CS was responding to questions from nominated Senator Beatrice Ogolla, who raised concerns about the fate of workers in sugar and textile firms previously owned by the State. The Kenya Union of Sugar Plantation Workers (KUSPAW) had earlier sought legal intervention to halt the layoffs, citing uncertainty over employees’ futures.
Mutua explained that the redundancies were carried out under Section 40 of the Employment Act, which mandates employers to notify workers and unions, justify the process, and honour all statutory and contractual obligations. He clarified that his ministry’s role is to monitor compliance with Article 41 of the Constitution on fair labour practices, not to approve or block workforce reductions.
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In Kisumu County alone, 1,743 workers were affected across Chemelil, Muhoroni, and Miwani sugar companies. Muhoroni released 747 employees, Chemelil 903, and Miwani 93.
To cushion affected workers, the government has already disbursed Sh1.8 billion in salary arrears between May and August 2025. An additional Sh3.8 billion in salaries and Sh15 billion in terminal benefits are scheduled for phased payment by June 2026.
A Transition Committee comprising officials from the Ministries of Agriculture and Treasury, county governments, and union representatives is overseeing the process.
Mutua also revealed that all retrenched workers will remain on payroll for 12 months from May 2025, with lessees expected to absorb up to 80 per cent of the workforce. The remaining 20 per cent, mostly those nearing retirement or opting out will receive full compensation.
Mutua clarified that the Ministry of Labour was not involved in the leasing or sale of the mills and therefore did not conduct socio-economic impact assessments. However, he expressed readiness to collaborate with relevant agencies to mitigate the effects on affected communities.
By Masaki Enock
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