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Government faulted over delayed payment of terminal dues to former employees of Pan Paper

The National Assembly Committee on Implementation has faulted the Principal Secretary, State Department for Industry Dr. Juma Mukhwana for the delayed payment of terminal dues owed former employees of Pan African Paper Mills.

In a meeting chaired by the Embakasi West lawmaker who is also the Deputy Minority Whip, the lawmakers expressed concerns over what they termed as lack of goodwill from the Ministry of Investments, Trade and Industry to resolve the matter that has lingered since the company was put under receivership in 2019.

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The Committee urged the State Department to consider allocating a part of the monies due to the former workers in the forthcoming Supplementary Estimates, and to factor the balance in their next budget proposals before the Departmental Committee on Trade, Industry and Co-operatives.

The PS had been invited to apprise the Committee on the status of payment of the former employees of the company as provided for under Section 66 of the Employment Act 2012.

He implied that although the State Department did not bear the primary responsibility for the settlement of these dues, it was working towards resolving the matter.

In his submissions, Dr. Mukhwana told the lawmakers that the Ministry was not involved in the valuation of assets and liabilities of the Pan African Paper Mills adding that it is the Joint Receivers Messers, Muniu Thoithi and Kuria Muchiru and the Ministry of Finance that had been involved in the process.

The PS who tabled a list of 1,349 former employees told the Committee that his Ministry and that of Finance had been however directed by the National Assembly through the Committee on Implementation to undertake verification of all former employees of the defunct company, a process that they had completed successfully.

However, the lawmakers led by Mwenje told the PS that his responses were unsatisfactory.

They noted that the excuses that the ministry had not been involved in the valuation of the company as well as that budgetary constraints had delayed the settlement, did not suffice.

The Committee Members sought to know if the PS had presented a request through the Departmental Committee on Trade, Industry and Co-operatives in the Budget Proposals for the 2023/24 Financial Year, the subsequent Supplementary Estimates or even during the ongoing budgetary process including the recent consideration of the Budget Policy Statement.

“ I am sorry but I find your response unsatisfactory. Have you made an effort to table a request for the provision of the monies owed to these former workers in the last Financial Year or even during the subsequent consideration of Supplementary Estimates? Your submissions regarding this matter portray lack of goodwill on your part”, Mwenje told him.

At the same time, it emerged that the Principal Secretary, State Department for National Treasury had written to Dr. Mukhwana in November last year requesting that the ministry prioritizes the settlement of the dues with the ceilings approved in the 2022 Budget Policy Statement.

The legislators inquired on why the PS in a humanitarian endeavour had not adhered to the guidance offered by his counterpart in the National Treasury, and substituted some of their programs with the delayed payout.

In his defence, the PS told the Committee that though the National Treasury had given their commitment to facilitate the settlement of the dues, sector ceilings for the FY 2024/25 could not accomodate allocation for the payout.

Members termed the 15-year long wait unfortunate, but emphasized that justice has to be delivered on the matter. They expressed concerns that some of the former workers may not be alive to enjoy their dues when they are finally paid.

The former workers are owed Kshs. 230 million in dues with only Kshs. 75 million having been paid to them in 2018, as ex-gratia payment based on the former employees’ three months salary, net of Pay As You Earn (PAYE).

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