4,000 workers seek to stop sugar mills leases

Muhoroni sugar company which has been closed indefinitely and reposesed by Kenya Revenue Authority (KRA).[FILE,Standard] Over 4,000 employees from four State-owned sugar factories have filed a case in court seeking to stop a planned redundancy and the ongoing privatisation. The workers drawn from Chemelil, South Nyanza, Muhoroni and Nzoia sugar companies accuse the Ministry of Agriculture of breaching a memorandum of understanding signed on May 7 ahead of the leasing of the mills to private investors. The petitioners, led by James Agumba, David Nyanchongi, and Mackenzie Owiti, say the MoU guaranteed job security during the privatisation process. Through the Kenya Union of Sugar Plantation and Allied Workers, they claim the redundancy notices were issued unlawfully and without consultation. The workers are seeking compensation, reinstatement, and an order halting further privatisation until the case is heard and determined. "The government must first honour its obligations under the existing agreements, including payment of salaries, arrears, and benefits owed to the employees," they say. They say the redundancy notices, effective October 31, were issued "notwithstanding that the tenets of procedure as envisaged under Section 40 of the Employment Act are yet to be complied with." "The 1st respondent (ministry) and the affected companies have already issued 30-day redundancy notices, even though there is total confusion on who is retained and who is not. No report has been availed giving details of terminal benefits, accrued leave, pension, or certificate of service," the petitioners claim. The workers say the redundancy was declared even as the ministry defaulted on key payments agreed upon before the handover of the factories to Kibos Sugar and Allied Industries, Busia Sugar Industry Ltd, West Valley Sugar Company, and West Kenya Sugar Company, under 30-year leases. The claimants argue that the MoU provided for voluntary early retirement and phased settlement of over Sh5.3 billion in salary arrears. According to the agreement, Sh1 billion was to be paid to workers before the takeover; Sh600 million for salary arrears and Sh400 million for salaries from May 2025, while another Sh1.5 billion was to be released in July for further arrears. "Out of the verified salary arrears of Sh4.7 billion as at May 2025, only Sh2.5 billion has been factored into the phased payment schedule, leaving Sh2.2 billion unaccounted for," the petitioners note. They also accuse the ministry of diverting funds meant for the arrears. "The 1st respondent has been using funds captured in the MoU for paying current salaries instead of verified arrears. For instance, out of the second batch of Sh1 billion, Sh522 million was used for current salaries," says Agumba. He, however, says they are not opposed to privatisation. The petitioners further allege that persons living with disabilities and non-unionised staff have been discriminated against in the redundancy process, saying the government failed to consider equity and transparency. They want the court to declare the redundancy notices "premature and void ab initio", and direct the government to release the full arrears. Further, the workers want the court to compel the Transition Committee under the Agriculture Ministry to produce a verified report of all retained and non-retained staff, their benefits, and statutory deductions. Additionally, they are seeking damages for violation of their constitutional rights to fair labour practices and social and economic welfare.

4,000 workers seek to stop sugar mills leases

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