Sections 87 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 87 says a court can take cognizance of an offence under the Code only on a complaint by or under the authority of the appropriate Government, and only a Metropolitan Magistrate or Judicial Magistrate of the first class can try it. Section 88 makes a company, and the people in charge of it, liable for a company's offence, with a due-diligence defence.
No court takes cognizance of an offence under the Code except on a complaint made by or under the authority of the appropriate Government (s.87(1)). No court inferior to a Metropolitan Magistrate or Judicial Magistrate of the first class may try such offences (s.87(2)). Where a company commits an offence, the company and every person in charge of and responsible to the company for the conduct of its business at the time are deemed guilty unless they prove the offence was without their knowledge and they exercised all due diligence (s.88(1)). Directors, managers, secretaries or other officers are also liable where the offence was with their consent or connivance or is attributable to their neglect (s.88(2)). "Company" includes a firm, an LLP and other associations of individuals.
Section 87: who can start a prosecution, and where
| Sub-section | Rule |
|---|---|
| 87(1) | No court shall take cognizance of any offence punishable under the Code save on a complaint made by or under the authority of the appropriate Government. |
| 87(2) | Notwithstanding the Code of Criminal Procedure, 1973, no court inferior to that of the Metropolitan Magistrate or Judicial Magistrate of the first class shall try offences under the Code. |
What this means in practice
- A worker, union or competitor cannot file a criminal complaint directly. The complaint must come from, or be authorised by, the appropriate Government (Central or State under s.2(b); see the appropriate Government). One exception in the text is the confidential-information offence in s.86(19), which says it is punishable "on a complaint made by or on behalf of the Trade Union or individual business affected"; how that sits with s.87(1) is not spelled out in the text.
- Administrative penalty is a separate track. For the offences listed in s.85(1), an enquiry officer can impose a penalty; see sections 84 and 85. Court prosecution under s.87 covers the offences that are not on that list, and failures to pay the s.85 penalty (s.85(3)).
- Forum. The trial is before a Metropolitan Magistrate or Judicial Magistrate of the first class. The Code names the Code of Criminal Procedure, 1973 here. From 1 July 2024 that Code was replaced by the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS); this article gives no BNSS section numbers.
For the offences and fines that such a court would try, see section 86(1) to (6) and section 86(7) to (20). If a complaint or notice has reached you, our legal dispute resolution team can help.
Section 88: offences by companies
Sub-section (1): persons in charge
If the person committing an offence under the Code is a company, then:
- Every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, and the company itself, shall be deemed guilty and may be proceeded against and punished.
- Proviso: such a person is not liable to any punishment if he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent it.
The burden under the proviso is on the person. Both limbs are required: lack of knowledge and due diligence. A person who did not know, but had no systems to prevent the offence, does not meet the second limb on the text.
Sub-section (2): directors and officers
Notwithstanding (1), where an offence has been committed by a company and it is proved that it was committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer, that person is also deemed guilty and may be proceeded against and punished. Here the burden is on the prosecution ("it is proved"), which differs from the proviso to (1).
| Point | s.88(1) | s.88(2) |
|---|---|---|
| Who | Person in charge of and responsible for the conduct of the business | Director, manager, secretary or other officer |
| Trigger | Being in charge at the time of the offence | Consent, connivance or neglect, proved |
| Defence | No knowledge and all due diligence, proved by the person | Not applicable; the prosecution must prove the link |
The Explanation: who counts as a "company"
For the section, "company" means any body corporate and includes (i) a firm, (ii) a limited liability partnership registered under the Limited Liability Partnership Act, 2008, and (iii) other association of individuals. "Director", in relation to a firm, means a partner in the firm. So a partner in a partnership firm and a partner of an LLP can be proceeded against as a director-equivalent. A proprietorship is not a body corporate, and the text does not mention a sole proprietor; the employer in that case is the individual.
Practical steps for employers
| Step | Why |
|---|---|
| Name a responsible officer for labour-law compliance in writing | Shows who was "in charge" and records delegation |
| Keep a dated compliance calendar for notices, returns and permissions | Evidence of "all due diligence" |
| Record board or partner-level review of Chapter X steps and of penalty notices | Answers a "neglect" allegation under (2) |
| Preserve the records behind each filing | The proviso needs proof, not assertion |
| Train HR and plant heads on the trigger events (lay-off, retrenchment, closure, standing-order changes) | Reduces the chance of a first offence |
Our legal dispute resolution team reviews such policies and prepares defence files.
Central Rules, 2026
The Central Rules, 2026 (G.S.R. 342(E), 8 May 2026) make no separate rule on cognizance or company liability. They do prescribe the enquiry for s.85 penalties in rule 44 and compounding in rule 38; see rule 44 and rule 38. These apply to Central-sphere establishments; where the State Government is the appropriate Government, the State's own rules apply.
Example. A private limited company with a factory of 400 workers closes a unit without permission under s.80. The appropriate Government authorises a complaint. The company is liable, and so is the plant head who was in charge and responsible for running the business. The plant head can avoid punishment only by proving the closure happened without his knowledge and that he exercised all due diligence. The company secretary is liable under s.88(2) only if it is proved that the closure was with his consent or connivance, or attributable to his neglect.
Need help with an offence notice?
A complaint naming the company, its directors and its managers raises separate questions for each person. Our legal dispute resolution team can review who was in charge, prepare the due-diligence record and advise on whether compounding under s.89 is open. Bring the notice and the compliance records.
Key takeaways
- Only the appropriate Government (or a person authorised by it) can file the complaint; trial is before a Metropolitan Magistrate or Judicial Magistrate of the first class.
- For a company offence, the company and the person in charge are deemed guilty, subject to a no-knowledge and due-diligence defence.
- Directors, managers, secretaries and officers are liable on proof of consent, connivance or neglect.
- "Company" includes firms, LLPs and other associations of individuals; a partner is a "director" of a firm.
- The CrPC named in s.87(2) was replaced by the BNSS from 1 July 2024.
Read next
- Section 89: composition of offences
- Section 86(1) to (6): penalties
- Sections 84 and 85: unfair labour practices and power to impose penalty
- Commencement and repeal of three Acts
Disclaimer: Based on the Industrial Relations Code, 2020 (as enacted) and, where noted, the Industrial Relations (Central) Rules, 2026 (G.S.R. 342(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.