Why haven’t you paid ex-Panpaper employees their dues? MPs probe State
The entrance to Pan African Paper Mills in Webuye town. A total of 1,349 former employees of the company are owed Sh230 million in terminal dues.
What you need to know:
- Only Sh75 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).
- The National Assembly Committee on Implementation censured the Principal Secretary (PS) in the State Department for Industry Dr Juma Mukhwana for failing to ensure the payment is expedited so as not to subject the former workers to untold suffering.
A parliamentary watchdog committee has faulted the government over delayed payment of terminal dues owed to 1,349 former employees of Pan African Paper Mills.
The former workers are owed Sh230 million, with only Sh75 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).
The National Assembly Committee on Implementation censured the Principal Secretary (PS) in the State Department for Industry Dr Juma Mukhwana for failing to ensure the payment is expedited so as not to subject the former workers to untold suffering.
The MPs termed the 15-year long wait unfortunate, and emphasised that justice must be served.
The committee members said there was lack of goodwill from the Ministry of Investments, Trade and Industry to resolve the matter that has dragged on for long since the company was put under receivership in 2019. They expressed concern that some of the former Pan Paper workers may not be alive to enjoy the fruits of their labour once the money is paid.
Chairing the meeting, the National Assembly Minority Whip Mark Mwenje (Embakasi West) asked the ministry to consider allocating part of the money due to the former workers in the forthcoming Supplementary Estimates, and to factor the balance in the next budget proposal.
The lawmakers had invited the PS to appraise the committee on the status of pending payment as provided for under Section 66 of the Employment Act 2012.
Dr Mukhawana told the MPs that the State Department did not bear the primary responsibility for the settlement of the dues, however, he was working towards resolving the matter.
He sought to clarify 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 Muniu Thoithi and Kuria Muchiru and the Ministry of Finance that had been involved in the process.
The PS tabled a list of the affected former employees. He said that as per the directive of the committee, his ministry and that of Finance has undertaken a verification exercise of all former employees of the defunct company, a process that they had been completed successfully.
However, the committee chair told the PS that his responses were unsatisfactory.
Mr Mwenje argued that the excuse by the ministry that it had not been involved in the valuation of the company as well as that budgetary constraints had delayed the settlement, did not suffice.
“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,” said Mr Mwenje.
The committee 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.
At the same time, it emerged that National Treasury PS Chris Kiptoo had written to Dr Mukhwana in November last year requesting that the ministry prioritises the settlement of the dues with the ceilings approved in the 2022 Budget Policy Statement.
The legislators inquired on why the PS had not adhered to the guidance offered by his counterpart in the National Treasury.
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 accommodate allocation for the payout.
