The government has finally taken concrete steps to settle the long-running dispute over unpaid dues for former Kenya Cooperative Creameries (KCC) workers, nearly 30 years after the payments were first delayed.
The claims, estimated at Sh204 million, have remained unresolved since the 1990s, leaving many of the ex-employees in financial and health struggles.
A multi-agency team bringing together the Office of the Attorney General, the ministries of Cooperatives, Labour, Agriculture, and the National Treasury has been formed to verify the claims.
The committee is expected to begin work next week and table its report by the end of October.
Appearing before the Senate Committee on Labour and Social Welfare on Tuesday, Cooperatives and MSMEs Development Cabinet Secretary Wycliffe Oparanya confirmed that the findings would shape the government’s recommendations and determine whether the funds will be included in 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 matter that has dragged for decades.
Labour CS Alfred Mutua called for a Cabinet memo to ensure executive approval and allocation of resources, saying this would guarantee fairness and social justice.
Senators on the committee, led by 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 stick to the timelines. They warned that further delays would be unfair to the ageing claimants, most of whom have been unemployed since 1997.
The Attorney General had earlier advised that the issue be resolved through an out-of-court settlement.
While liabilities of the old KCC were transferred to the New KCC, the workers’ dues were excluded, creating a legal gap that has kept the case unresolved for years. The Interministerial Committee is required to present its report to the Senate by November 6, 2025.
Treasury Cabinet Secretary John Mbadi, however, has maintained that the government has no legal obligation to pay the claims. In August, he asked Parliament to dismiss a petition by the workers, pointing to a July 2020 Court of Appeal ruling that exempted New KCC Limited from responsibility.
“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 senators.
“Consequently, the National Treasury respectfully maintains its view that the petition be dismissed.”
Represented by lawyer Namada Simoni, the petitioners are demanding unpaid terminal benefits, unremitted Maziwa Sacco deductions, and provident fund contributions totalling Sh204.5 million. Simoni urged senators to help craft a practical solution, stressing that many of the workers are now elderly and face heavy medical bills.
“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 decision that had ruled in favour of the petitioners but advised the Attorney General to guide the government in resolving the dues.
Tracing the case’s background, Mbadi explained that KCC Ltd went into receivership in 1999 under KCB Bank, was sold to private investors in 2000, and only 196 workers were retained while others were released with statutory payouts.
In 2003, the government repurchased its assets and rebranded the company as New KCC Ltd in 2004.
“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.
The petitioners filed their suit in 2013 against New KCC and the government, seeking Sh204,472,555.20.
Though the High Court initially ruled in their favour, the Court of Appeal overturned the decision on July 10, 2020, absolving New KCC of liability.
