The Labour Relations Court in Kisumu has suspended the leasing of state-owned sugar factories until workers’ issues, including Sh4 billion salary arrears, are addressed.
The injunction was issued on Thursday evening by judge Mathews Nderi Nduma, pending hearing and determination of the application.
It was filed under a certificate of urgency on August 12 by Francis Wangara, secretary general of the Kenya Union of Sugar Plantation and Allied Workers.
The union wants workers’ issues, including the payment of more than Sh4 billion salary arrears, addressed before leasing can continue.
The application names Agriculture CS Peter Munya, the Agriculture and Food Authority (AFA), the Kisumu county government and the Office of the Attorney General.
It cites Chemelil Sugar Company, Miwani (in receivership), Muhoroni (in receivership), Nzoia and Nzoia Sugar, named in an advertisement on July 10.
“Pending the hearing and determination of this application inter-partes, the honorable court hereby issues an order of injunction stopping the leasing of the state-owned sugar factories and or conducting further business in relation to leasing of the said factories,” Employment and Labour Relations Court judge ordered.
Judge Nduma also ordered that the application be served and responded to within 14 days of service.
A hearing will be held virtually on August 30.
We are not opposed to leasing the sugar factories, but this an opportune time to ensure the matter is put on hold to address the plight of workers.
Francis Wangara, head of sugar workers’ union
Speaking to the Star, Wangara said workers have suffered for a long time because of salary arrears.
He said the union had written to the Agriculture CS about workers’ salaries, asking that leasing not be concluded until the workers’ problems are sorted.
No response has been received, Wangara said, though the leasing process is coming to an end.
“It should be clearly known we are not opposed to leasing the sugar factories, but this an opportune time to ensure the matter is put on hold to address the plight of workers,” he said.
He added, “They must clear what is owed to the workers because it has been a trend that when such processes [leasing] are being undertaken, workers are left languishing in poverty.”
The union head said that passing the salary debt onto new investors will inflect more misery on employees.
Wangara said workers are the engines of production and without them, no money can be made. However, the debt of public sugar mills does not cater for workers’ arrears, he said.
The government has started the process of leasing five sugar millers – Chemelil, Miwani, Muhoroni, Nzoia, and South Nyanza companies.
The International Expression of Interest was advertised on July 10 and closed on August 3. A Request for Proposal will be sent to all firms prequalified.
CS Munya has said the government only wants serious investors who can partner with the government to revive the sugar sector.
“The ministry has had consultations with governors in the sugar belt on these issues and the leasing process is on course,” he said last week.
In the July advert, AFA director Solomon Odera had said that in preparation for leasing, the authority has started approving restructuring of each company’s balance sheet.
The plan is to write off the amount owed to it and to the former Kenya Sugar Board-Commodities Fund as at December 31, 2019; to write off tax penalties and interest as June 30, 2009, and any additional interest and penalties accrued since then.
The objective is to facilitate turnaround of the sugar companies to profitability through modernisation and efficient management.
This will improve competitiveness in Kenya, the EAC, Comesa (Common Market for Eastern and Southern Africa) and the global market.