CS MUTUA FACES SENATE SCRUTINY OVER SUGAR SECTOR LAYOFFS

Parliament Buildings
Wednesday, 29th October 2025

The Cabinet Secretary for Labour and Social Protection, Dr. Alfred Mutua, has defended the discharge of a section of workers from State-owned sugar companies that were recently leased, saying the move is part of a wider reform agenda aimed at restoring efficiency, sustainability and competitiveness in the struggling sector.
Appearing before the Senate Plenary this Wednesday, Dr. Mutua faced a series of questions posed by Senator Beatrice Ogolla (nominated) on behalf of Senator Prof. Tom Ojienda (Kisumu) regarding the recent restructuring of public sugar and textile industries.
Dr. Mutua said the Government’s actions were guided by law and respect for workers’ rights under the Constitution. “The ongoing restructuring process in State-owned industries is part of comprehensive reform programmes aimed at restoring efficiency, financial sustainability and competitiveness among these corporations,” he said.
He explained that the redundancies were being carried out strictly under Section 40 of the Employment Act, which requires employers to notify unions and affected employees, justify the process and pay all statutory and contractual dues. “This process balances economic necessity with human dignity, ensuring no worker is left without lawful compensation,” the CS assured.
The Kenya Union of Sugar Plantation Workers had initially moved to court to halt the layoffs until the fate of the affected employees was clarified. However, Dr Mutua revealed that the Ministry of Agriculture, the Kenya Sugar Board and the National Treasury held negotiations with the union, leading to a Memorandum of Understanding (MoU) dated 7th May 2025 to guide the process.
“The MoU ensures that the process is fair and transparent,” he said, adding that while his Ministry’s mandate is to ensure compliance with Article 41 of the Constitution on fair labour practices, it does not have powers to approve or reject redundancies.
According to Dr Mutua, a total of 1,743 employees in Kisumu County have been affected by the restructuring of Chemelil, Muhoroni and Miwani sugar companies. Muhoroni Sugar Company released 747 workers, Chemelil 903 and Miwani 93.
“Miwani was not leased but sold to Crossley Holdings Limited in July 2025. The new owners requested all workers to reapply for their positions and 79 of them were successfully re-engaged,” he told Senators.
He disclosed that the Government has already made partial payments amounting to KSh1.8 billion in salary arrears between May and August 2025, with the remaining Ksh.3.8 billion in arrears and Ksh.15 billion in terminal dues to be paid in instalments by June 2026.
CS Mutua said a Transition Committee comprising officials from the Ministries of Agriculture and Treasury, county governments and union representatives continues to oversee the process. 
On whether a socio-economic impact assessment had been conducted before the layoffs, CS Mutua clarified that his Ministry was not directly involved in the leasing or sale of the sugar mills. “The Ministry of Labour did not approve or oversee the leasing process and therefore did not undertake a socio-economic impact assessment,” he stated. He, however, expressed the Ministry’s willingness to collaborate with relevant agencies to mitigate adverse effects on affected communities.
To safeguard the livelihoods of retrenched workers, the CS said the Ministry had initiated plans to reskill and redeploy affected employees. “In accordance with the MoU, all workers will remain in employment for 12 months from May 2025, during which lessees will absorb up to 80 per cent of the current workforce,” he said.
“The remaining 20 per cent, primarily those nearing retirement or opting out voluntarily will be released with full compensation,” he added. Once the final list of retained staff is confirmed, the Ministry will roll out retraining programmes through the Directorate of Industrial Training.
He pointed to the Miwani case as a model of successful transition. “Seventy-nine out of ninety-three former employees of Miwani Sugar Company were re-engaged by the new owners, underscoring the Government’s commitment to preserving livelihoods and economic stability,” he said.
Responding to concerns about the broader economic implications of fiscal reforms on counties reliant on State industries, Dr. Mutua said fiscal restructuring was primarily the mandate of the National Treasury. “Nevertheless, the Ministry of Labour advocates that all fiscal and structural adjustments be implemented in a manner that upholds transparency, accountability and social fairness, ensuring that no region or community bears disproportionate hardship,” he said.
During the supplementary question session, Senators pressed the Cabinet Secretary to explain why the government did not conduct an impact assessment before initiating the leasing process, arguing that the move had exposed workers in sugar mills to private entities placing them at high risk of mistreatment.
The lawmakers further sought clarification on the extent of involvement by workers’ unions and county governments in the entire process.
In response to concerns raised by Senators Boni Khalwale (Kakamega), Edwin Sifuna (Nairobi), Danson Mungatana (Tana River), Johnes Mwaruma (Taita Taveta), Samson Cherarkey (Nandi), Enoch Wambua (Kitui) and George Mbugua (Nominated), Cabinet Secretary Alfred Mutua revealed that under the agreement between the government and sugar mill workers, new investors are permitted to release a maximum of 20 percent of the workforce.
He assured the House that the government is obligated, under the agreement, to settle all dues owed to both exiting and retained workers up to the time private investors assume operations.
The CS Mutua added that a preliminary study had been conducted on the sugar industry as a whole before the leasing process was rolled out.
In conclusion, the CS reaffirmed his Ministry’s commitment to the welfare of workers. “This process is not merely administrative, it touches the lives of families and communities. The Government’s approach seeks to balance economic revitalisation with fairness, legality and compassion,” he told the Lawmakers.