Labour and Social Protection Cabinet Secretary Dr. Alfred Mutua has defended the government’s decision to lay off hundreds of workers from state-owned sugar companies, saying the move is part of a broader reform plan to revive the struggling sector.

Appearing before the Senate Plenary on Wednesday, Dr. Mutua faced a string of questions from Senator Beatrice Ogolla (nominated), representing Kisumu Senator Prof. Tom Ojienda, over the restructuring of public sugar and textile firms.

Dr. Mutua explained that the retrenchments were carried out within the law and guided by the Constitution’s provisions on fair labour practices.

“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.

Redundancies Conducted Within Legal Framework

The CS said the layoffs were executed under Section 40 of the Employment Act, which requires employers to notify unions and affected employees, justify redundancies, and settle all dues.

“This process balances economic necessity with human dignity, ensuring no worker is left without lawful compensation,” Dr. Mutua assured lawmakers.

He noted that the Kenya Union of Sugar Plantation Workers had initially gone to court to stop the layoffs.

However, talks between the Ministry of Agriculture, the Kenya Sugar Board, the National Treasury, and the union led to a Memorandum of Understanding (MoU) dated May 7, 2025, guiding a fair and transparent process.

“The MoU ensures that the process is fair and transparent,” he said, adding that while his Ministry oversees compliance with Article 41 of the Constitution, it lacks powers to approve or block redundancies.

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Over 1,700 Jobs Affected in Kisumu

Dr. Mutua revealed that a total of 1,743 employees in Kisumu County had been affected by the restructuring at Chemelil, Muhoroni, and Miwani sugar companies.

Of these, Muhoroni released 747 workers, Chemelil 903, and Miwani 93.

He clarified that Miwani Sugar Company was sold to Crossley Holdings Limited in July 2025, not leased.

“The new owners requested all workers to reapply for their positions and 79 of them were successfully re-engaged,” he said.

The CS further disclosed that the government had already paid KSh1.8 billion in salary arrears between May and August 2025, with a balance of KSh3.8 billion in arrears and KSh15 billion in terminal benefits expected to be cleared by June 2026.

Transition and Welfare Measures

To oversee the process, Dr. Mutua said a Transition Committee comprising officials from the Ministries of Agriculture and Treasury, county governments, and union representatives was already operational.

He clarified that his Ministry was not involved in the leasing or sale of sugar mills and therefore did not conduct a socio-economic impact assessment.

“The Ministry of Labour did not approve or oversee the leasing process and therefore did not undertake a socio-economic impact assessment,” he stated.

However, he expressed readiness to work with other agencies to cushion affected communities.

“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 explained.

“The remaining 20 per cent, primarily those nearing retirement or opting out voluntarily, will be released with full compensation,” he added.

Retraining programmes, he said, would be rolled out through the Directorate of Industrial Training for workers not retained.

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Senators Demand Accountability

During the supplementary question session, senators including Boni Khalwale (Kakamega), Edwin Sifuna (Nairobi), Danson Mungatana (Tana River), Samson Cherarkey (Nandi), and Enoch Wambua (Kitui) demanded answers on why no impact assessment was done before leasing began, warning that private investors could exploit workers.

Dr. Mutua responded that a preliminary study on the sugar industry had been conducted prior to the leasing, and reassured legislators that investors were only allowed to release a maximum of 20 percent of the workforce.

“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,” he said.

Balancing Economic Reform and Social Fairness

Dr. Mutua acknowledged the economic strain in sugar-producing regions but reiterated that fiscal restructuring was the responsibility 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,” he said.

Concluding his statement, the CS reaffirmed the government’s commitment to workers’ welfare.

“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.

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A photo of MPs attending the previous session in National Assembly PHOTO/Parliament