Government sets deadline to resolve Sh204 million former KCC workers’ dues

After nearly three decades, the government has finally moved to address long-standing claims by former Kenya Cooperative Creameries (KCC) employees, many of whom have been waiting since the 1990s for unpaid benefits from the defunct company.

An Interministerial Committee—bringing together officials from the Office of the Attorney General, the ministries of Cooperatives, Labour, Agriculture, and the National Treasury—has been tasked with auditing and verifying claims valued at about Sh204 million.

Appearing before the Senate Committee on Labour and Social Welfare on Tuesday, Cooperatives and MSMEs Development Cabinet Secretary Wycliffe Oparanya confirmed that the committee will hold its first meeting next week and submit a report by the end of October. He said the findings would guide recommendations for payments, which could be factored into the November supplementary budget.

“We expect a supplementary budget to be processed in November, and we would then appeal to this Committee to consult the National Assembly to approve the payments to the former KCC workers,” Oparanya said, describing the process as the most concrete step yet in a dispute that has dragged on for decades.

Cabinet memo

Labour CS Alfred Mutua, who also attended the session, urged the preparation of a Cabinet memo to secure executive backing and ensure funds are allocated “in the spirit of equity and social justice.”

Senators, led by committee chair Julius Murgor (West Pokot) and including Stewart Mazdayo (Kilifi), Seki Lenku (Kajiado), Alexander Mundigi (Embu), Miraj Abdullahi, Joe Nyutu (Murang’a), and Beth Syengo, pressed Oparanya to adhere strictly to the timelines, warning that further delays would only disadvantage the ageing petitioners, many of whom have been jobless since 1997.

The Attorney General had earlier recommended an out-of-court settlement, noting that while the liabilities of the old KCC were transferred to New KCC, workers’ dues were excluded—trapping them in a decades-long legal limbo. The Interministerial Committee is expected to present its report to the Senate by November 6, 2025.

In August, Treasury CS John Mbadi asked Parliament to dismiss a petition filed by the former employees, citing a July 10, 2020 Court of Appeal ruling that New KCC Limited was not liable for the payments.

“The prevailing legal position, as affirmed by the Court of Appeal, is that, since the termination of the employees occurred when KCC Ltd was under private management and in compliance with Section 3(1) and (2) of the Transfer of Business Act, there is no established legal obligation upon the government,” Mbadi told the Senate Committee on Labour and Social Protection.

“Consequently, the National Treasury respectfully maintains its view that the petition be dismissed.”

Unpaid terminal benefits

Represented by lawyer Namada Simoni, the petitioners are seeking settlement of unpaid terminal benefits, unremitted Maziwa Sacco deductions, and provident fund contributions amounting to Sh204.5 million. Simoni appealed to the committee to devise a practical way forward, stressing the urgency of the matter.

“We have filed a case at the Court of Appeal seeking to have the decision reviewed. In the meantime, this committee should find an innovative mechanism to help the former employees who are now in their 70s and are struggling with medical bills,” Simoni said.

The Court of Appeal had earlier overturned a High Court ruling that held New KCC liable, but encouraged the Attorney General to advise the government on settling the dues.

Mbadi also traced the history of the case. He explained that KCC Ltd was placed under receivership in 1999 by KCB Bank, sold to private investors in 2000, and that 196 employees were retained while the rest were terminated with statutory payouts. In 2003, the government repurchased the assets and established New KCC Ltd in 2004 as a state corporation.

“The claimants did not object to the public notice regarding the transfer, and section 8 of the Transfer of Business Act came into effect, barring claims after the six-month notice period,” Mbadi said.

He added that the petitioners filed suit in 2013 against New KCC and the government seeking Sh204,472,555.20.

Although the High Court initially ruled in favour of the petitioners, New KCC appealed, and on July 10, 2020, a three-judge bench of the Court of Appeal overturned the decision, holding that New KCC was not liable.

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