The Kenyan government has announced plans to reskill and redeploy workers affected by the restructuring of state-owned sugar companies. Labour Cabinet Secretary Alfred Mutua shared these details during a Senate appearance on October 29, 2025, as part of efforts to revive the struggling sugar industry. This follows legal challenges from thousands of employees over redundancy notices.
Workers impacted by the ongoing restructuring of state-owned sugar companies, including South Nyanza (Sony), Chemelil, Muhoroni, and Nzoia, will receive reskilling and redeployment support, according to Labour and Social Protection Cabinet Secretary Alfred Mutua. Speaking before the Senate Plenary on Wednesday, October 29, 2025, Mutua outlined this initiative as part of a broader government strategy to enhance efficiency and sustainability in the sugar sector, which has faced persistent operational and financial difficulties.
"To safeguard the livelihoods of retrenched workers, the Ministry has initiated plans to reskill and redeploy affected employees," Mutua told the Senate. He emphasized compliance with a Memorandum of Understanding (MoU) signed on May 7, 2025, between the Ministry of Agriculture, Kenya Sugar Board, National Treasury, and the Kenya Union of Sugar Plantation Workers. Under the MoU, all workers remain employed for 12 months from May 2025, with lessees required to absorb up to 80 percent of the current workforce. The agreement aims to ensure fairness, transparency, and absorption by new investors amid mass layoffs.
Earlier in October 2025, thousands of workers from the four factories challenged redundancy notices in court after the mills were leased to private operators. They argued that discussions on terminal benefits and entitlements were ongoing. Mutua defended the process, stating it adheres to Section 40 of the Employment Act, which mandates prior notification, justification for termination, and payment of dues.
In Kisumu County, 1,743 employees from Chemelil, Muhoroni, and Miwani sugar companies have been affected. The government has paid Ksh 1.8 billion in partial salary arrears for May to August 2025, with Ksh 3.8 billion more in arrears and Ksh 15 billion in terminal dues slated for settlement by June 2026. A transition committee, including officials from the Ministries of Agriculture and Treasury, county governments, and union representatives, is overseeing the process. Mutua affirmed the government's legal obligation to settle all dues and uphold labour rights under Article 41 of the Constitution.