Former employees of Kenya Cooperative Creameries (KCC) may not receive their Sh204 million in unpaid dues after nearly 30 years, following Treasury’s statement that the government holds no obligation to settle these claims.
Treasury CS John Mbadi recently responded to a petition urging the payment of former employees’ terminal benefits and Maziwa SACCO contributions, which were deducted but allegedly not remitted by KCC.
In his statement, CS Mbadi clarified that the government has no legal duty to cover these dues, as the employees’ contracts were terminated when KCC was under private ownership.
Mbadi outlined that KCC went into receivership under Kenya Commercial Bank (KCB) in 1999. The Receiver Manager, Price Waterhouse Coopers, facilitated KCC’s sale to private owners in 2000, forming KCC (2000). At that time, 196 employees were retained, while the rest were dismissed with payouts according to prevailing laws.
The government later reacquired KCC assets on June 6, 2006, and reestablished it as the New KCC in 2004. A public notice on this transition appeared in the Daily Nation on June 28, 2005. In 2013, former employees filed a lawsuit against New KCC and the government, and the High Court ruled New KCC liable for the dues. However, New KCC appealed, and in 2020, the Court of Appeal cleared it of liability.
“In view of the above, considering the employees’ contracts were terminated when KCCLtd was under private hands, and having complied with the provisions of the section 3 (1) and (2) of the Transfer of Business Act, the National Treasury believes that, there is no legal obligation on Government part, and therefore the petition should be dismissed”, Mbadi said.
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