Union claims sidelining in Pan Paper employee payout despite government release of funds.
The Kenya Union of Printing, Publishing, Paper Manufacturers and Allied Workers has accused the government of sidelining both the union and former employees in the ongoing payout of terminal dues following the collapse of the Pan African Paper mills now rebranded as Rai Paper.
Through its National Organizing Secretary and former National Vice-Chairman Stephen Watiti, the union says efforts to secure fair compensation for ex-workers have been overlooked even after the government released funds aimed at settling long outstanding dues.
In late November 2025, the national government disbursed Ksh230 million to settle terminal dues owed to former Pan Paper employees, a milestone long awaited by the 1,349 beneficiaries identified for payment.
The funds release was marked as a significant step toward justice for workers whose livelihoods were greatly affected years after the mill’s collapse and reopening under new ownership.
According to Watiti, the formula used by the government to determine entitlements is “erroneous” and has resulted in ineligible recipients including former directors benefiting from the funds despite not having been part of the negotiation or workforce when the mill shut down.
He argued that only unionisable employees should qualify for benefits such as 30 % of basic pay from the day the factory closed until the 2017 budget was set, terminal dues up to the closure date and house rent payments from the day of closure.
The union says these terms reflect earlier agreements reached through sustained advocacy, including pressure mounted by COTU and a motion by former nominated MP Patrick Wangamati in 2017.
Further, Watiti also criticized the handling of the mill’s assets following its collapse. He alleged that key assets including rental income from employee housing, a guest house, apartments in Muthaiga, wood pulp, furnace oil and other machinery were disposed of under unclear circumstances, denying rightful value that could have cushioned the payout process.
Despite the payout, the union claims the majority of former workers remain dissatisfied, arguing that the payout structure fails to reflect the true liability owed to them and does not meet the expectations set by earlier parliamentary directives.
In 2017 Parliament directed the Treasury and relevant ministries to compile an authentic list of former staff and compute their terminal dues under the Employment Act 2012.
Union officials are now calling for the entire payment process to be reversed and for fresh consultations to be held with workers and their representatives before any further payments are made.
They have threatened legal action if their grievances are not urgently addressed.
The Pan Paper saga stretches back more than a decade. The mill was placed under receivership in 2009 after years of financial troubles and mismanagement, leading to thousands of layoffs and economic disruption in Webuye and the wider Western region.
