The government has given the green light for mass layoffs at state-owned sugar factories that were recently handed to private investors, setting the stage for a major confrontation in the sugar sector.

The directive allows the management of Chemelil, Muhoroni, Sony and Nzoia to terminate the contracts of all their workers as part of the lease transfer to new operators.

Agriculture Principal Secretary Kipronoh Ronoh instructed the managing directors of the four millers to issue redundancy notices to employees, a move that is set to affect more than 5,000 staff.

He explained that those interested in continuing with the companies under the new investors will have to reapply for their jobs.

In his directive, Ronoh stressed that the notices must be written, giving clear reasons for the termination and stating the dues owed to workers, with copies forwarded to county labour offices.

“Employees should also be informed that all their dues and lawful entitlements will be fully paid in accordance with the provisions of the law and the CBAs [collective bargaining agreements],” said the PS.

The order has triggered concern as the government has yet to settle salary and allowance arrears owed to workers, estimated at Sh5.23 billion.

The debt was supposed to be cleared within six months of the lease but is still pending, raising questions on whether it will be included in the retrenchment payments.

Sony Sugar has already moved to act on the directive. Its managing director, Martine Dima, announced the termination of all employees through a memo.

“The management ... wishes to notify all employees that their services with the company will terminate due to redundancy on 31st October 2025,” stated the notice.

With Sony now under the control of Busia Sugar Industries and rebranded as New Sony 2025, the investor will run the firm for the next 30 years.

The other leases saw Nzoia handed to West Kenya Sugar, Chemelil to Kibos Sugar & Allied Industries, and Muhoroni to West Valley Sugar.

The planned layoffs will affect thousands of households that have long relied on sugar mill jobs. In sugar belt towns, the ripple effects are expected to extend to local businesses, traders, and transporters who depend on the factories for income.

For some workers, especially those nearing retirement, redundancy could bring relief through gratuities and terminal benefits, potentially amounting to sizeable payouts.

Still, uncertainty hangs over whether the government will meet its pledge to pay off the arrears, leaving many workers anxious about the future.