The main gate at Nzoia Sugar Company in Kanduyi constituency Bungoma County.
About 4,000 employees of four state-owned sugar factories that were recently leased out to private millers have challenged redundancy notices issued to them, amid talks on their terminal benefits and other entitlements.
The workers — drawn from Chemilil Sugar Company, South Nyanza (Sony) Sugar Company, Muhoroni Sugar Company, and Nzoia Sugar Company — say talks regarding their terminal benefits and other entitlements are still ongoing and the decision was therefore, premature.
The employees were issued with a 30-day redundancy notice ending on October 30, and they argue that there was confusion on the process and there was no clarity in terms of those who will be retained by the factories.
“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 further said there is no report detailing notice or 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.
Through lawyer Kenneth Amondi, 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.
Workers at Chemelil Sugar protest the takeover of the factory by Kibos Sugar on May 13, 2025.
Mr Amondi added that unverified salary arrears stood at Sh900 million, and that phased payments captured in the memorandum of understanding (MOU) has only provided for payment of Sh2.5 billion for verified salary arrears, hence Sh2.2 billion of verified salary arrears for which the Ministry of Agriculture is responsible for, is not provided for contrary to a clause in the MOU.
The lawyer said the ministry has been using the phased payment captured in a clause of the MOU, which was meant for verified salary arrears before the signing of the MOU for purposes of paying current salaries.
He said this was done in respect of the second batch of Sh1 billion, where Sh522 million was used to pay current salaries, hence the entire payment schedule is “now distorted and in utter confusion”.
Issued redundancy notice
The Ministry of Agriculture carried out the long-awaited leasing of the four public sugar factories, in efforts 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.
“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.
Obsolete facilities and stalled machinery at Chemelil Sugar Factory, on June 17, 2025.
The workers said the factories have not given justification for retaining some staff as against the others through an objective selection criteria, and the release of the workers is against fair procedure, as there is no clarity in terms of the terminal dues of the affected employees, contrary to section 40 of the Employment Act.
“It is the plaintiff’s case that at the core of negotiations prior to the leasing of the four factories to the investors afore-stated was the demand by the workers that their job security and pending dues be safeguarded and a report detailing the benefits of the workers be availed,” Mr Amondi said.
The workers said in May 7 meeting with representatives from the Ministry of Agriculture, it was established that the salary arrears which were verified as at October 30, 2023 was Sh5.3 billion, out of which the government had already paid Sh650 million, leaving a balance of Sh4.7 billion, but the amount has since escalated to an unverified figure of Sh5.6 billion.
Court documents state that the parties agreed in in MOU that the workers were to be paid Sh600 million before take over and the remaining Sh400 million was to 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 include notice or payment in lieu, accrued leave, severance pay, all salary and benefits arrears accrued and certificate of service.
A wheel loader gathers sugarcane at the loading yard of Sony Sugar Company Limited in Awendo, Migori County, on June 11, 2025.
The Ministry, they added, was to be responsible for all unpaid salary arrears, pension contributions and statutory deductions up to the lease handover date and payment of the same is phased out.
“It is the plaintiff’s case that a dispute has since arisen given that the respondents are in breach of specific terms of the Memorandum of Understanding and further that the said document does not clearly capture the tenets of the agreement between the workers and the government,” the workers said.
