The government has sought an out-of-court settlement with over 4,000 workers from four State-owned sugar factories, who sued to stop redundancy notices issued to them.
Through Attorney General Dorcas Oduor, the government said the issues raised by the workers can be addressed outside the court, since the parties were in negotiations.
Part of the factory facility at Muhoroni Sugar Company in this picture taken on May 27, 2019.
Photo credit: Ondari Ogega | Nation Media Group
The workers drawn from Chemilil Sugar Company, South Nyanza (Sony) Sugar Company, Muhoroni Sugar Company, and Nzoia Sugar Company moved to court saying the notices were issued amid talks on their benefits, among other details.
They said there was no report detailing payment in lieu, accrued leave, severance (in line with the Collective Bargaining Agreement in force), all salary and benefits arrears accrued, including pension contributions and statutory deductions.
Employment and Labour Relations Court directed the Attorney General to file a response to the petition, to confirm whether the proposal was acceptable to the workers.
The case will be mentioned on October 30, a day before the redundancy notices take effect.
“Notwithstanding the pending mundane issues and clear confusion apparent, the 1st respondent (PS Agriculture) has instructed the 2nd, 3rd, 4th and 5th respondents ( the factories) to declare the plaintiffs redundant thereby occasioning total disorder and leaving the plaintiffs in limbo,” the petition stated.
The workers revealed that in a meeting on May 7, 2025, the parties allegedly identified the balance of verified salary arrears at Sh4.7 billion.
They added that unverified salary arrears stood at Sh900 million, and that phased payments captured in the memorandum of understanding (MoU) have only provided for payment of Sh2.5 billion for verified salary arrears.
It was their argument that Sh2.2 billion of verified salary arrears, for which the Ministry of Agriculture is responsible, is not provided for, contrary to a clause in the MOU.
The Ministry of Agriculture leased out the four public sugar factories in an effort to breathe life back into Kenya’s once-thriving sugar sector.
The four factories were handed to Kibos Sugar and Allied Industries, Busia Sugar Industry Ltd, West Valley Sugar Company and West Kenya Sugar Company, respectively, under a 30-year lease.
Court documents state that the parties agreed in in MoU that the workers were to be paid Sh600 million before takeover, and the remaining Sh400 million was to be paid as salary as from May 2025 going forward.
Further, each company was to be paid Sh150 million for payment of staff arrears.
They also stated that non-retained employees shall be separated through a voluntary early retirement scheme, which shall have an exit package that includes notice or payment in lieu, accrued leave, severance pay, all salary and benefits arrears accrued and a certificate of service.
“The respondents have already issued the redundancy notice notwithstanding that there is no clarity in terms of who has been selected and the selection procedure thereof, no clarity in terms of the specific terminal benefits to the plaintiffs as well as the extent of the said process hence the same is opaque contrary to the clear provisions of sections 40(1)(a) and (c) of the Employment Act,” stated the petition.
