Mumias Sugar's receivership under Kenya Commercial Bank resulted in the termination of 681 employees, triggering a labor dispute over unpaid wages and legal procedures.
Receiver-manager Ponangipalli Venkata Ramana Rao issued a notice on Tuesday terminating all contracts as of September 20, the date of receivership. The document stated, "Any payment to the affected employees shall be dealt with in accordance with the provision of the law," while promising temporary rehiring of former staff once operations resume.
The Kenya Union of Sugar Plantation and Allied Workers Mumias branch condemned the move, alleging violations of labor laws. Secretary Vitalis Makokha highlighted that over 2,000 workers, including contracted and management staff, faced abrupt job loss. He revealed Sh1.18 billion in unpaid salaries over 31 months and Sh859 million in unremitted statutory deductions, labeling employees as creditors.
The union urged the receiver-manager to adhere to legal protocols, stating, "Let Mr Rao review his decision and seek amicable ways of separation." Meanwhile, a taskforce led by Governor Wycliffe Oparanya defended the action, claiming it followed their recommendations. Chairman Kassim Were argued, "There are people staying at the factory creating debts without delivering anything. The best way is to come out of the hole by laying them off." The group plans to hire staff on a need basis as operations remain suspended.
