CS Alfred Mutua defends sugar sector layoffs as legal, necessary reform
CS Mutua disclosed that after discussions between the Ministry of Agriculture, the Kenya Sugar Board, and the National Treasury, an MoU was signed on May 7, 2025, to guide the restructuring process.
The government’s decision to reduce staff in State-owned sugar companies has come under scrutiny in the Senate, with Labour and Social Protection Cabinet Secretary Alfred Mutua defending the move as part of a broader reform plan aimed at improving the sector’s performance and financial stability.
Appearing before senators on Wednesday, Mutua responded to questions raised by nominated Senator Beatrice Ogolla, representing Kisumu Senator Tom Ojienda, on the restructuring of sugar and textile industries previously owned by the State.
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CS Mutua said the layoffs were carried out with full regard for the law and workers’ rights.
“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 told the Senate.
He explained that the redundancies were executed under Section 40 of the Employment Act, which obligates employers to notify employees and unions, justify the process, and pay all statutory and contractual entitlements.
“This process balances economic necessity with human dignity, ensuring no worker is left without lawful compensation,” he assured lawmakers.
The Kenya Union of Sugar Plantation Workers (KUSPAW) had previously sought legal intervention to halt the layoffs, citing uncertainty over employees’ futures.
CS Mutua disclosed that after discussions between the Ministry of Agriculture, the Kenya Sugar Board, and the National Treasury, an MoU was signed on May 7, 2025, to guide the restructuring process.
“The MoU ensures transparency and fairness throughout the process,” he added, emphasising that his ministry’s role is to monitor compliance with Article 41 of the Constitution on fair labour practices, rather than to approve or reject workforce reductions.
According to Mutua, 1,743 workers in Kisumu County were affected across Chemelil, Muhoroni, and Miwani sugar companies. Muhoroni released 747 employees, Chemelil 903, and Miwani 93.
“Miwani was sold to Crossley Holdings Limited in July 2025, and the new owners required all workers to reapply. Seventy-nine were successfully re-engaged,” he told senators, highlighting a smooth transition example.
Mutua noted that the government had already paid Sh1.8 billion in arrears between May and August 2025, with the remaining Sh3.8 billion in salaries and Sh15 billion in terminal benefits scheduled for phased payment by June 2026.
A Transition Committee, including officials from the Ministries of Agriculture and Treasury, county governments, and union representatives, continues to supervise the process.
When asked about socio-economic impact studies, Mutua clarified that the Ministry of Labour was not involved in the leasing or sale of the mills and thus did not conduct such assessments. He expressed willingness to work with relevant agencies to mitigate the effects on affected communities.
To protect retrenched workers, the ministry has introduced programs for retraining and redeployment.
“In line with the MoU, all workers will remain employed for 12 months from May 2025, with lessees absorbing up to 80 per cent of the workforce,” he said. The remaining 20 per cent, mostly those near retirement or choosing to leave, will receive full compensation.
Mutua pointed to Miwani’s transition as evidence of the government’s commitment to safeguarding jobs. “Seventy-nine out of ninety-three former Miwani employees were retained by the new owners, reflecting our dedication to livelihoods and sector stability,” he said.
Addressing broader fiscal concerns, Mutua stressed that structural adjustments fall under the National Treasury but urged that all reforms be implemented fairly and transparently. He concluded by affirming the ministry’s dedication to balancing sector revitalisation with workers’ rights.
“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 said.
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