L K writes: I run a small security firm and I want to introduce random drug and alcohol testing. Does the law allow me to do this and, if so, what can I do when someone tests positive? Should I dismiss people instantly or have a policy of two strikes and you’re out?

To introduce the new policy much will depend on your reasons for testing, writes Peter Done, managing director of Peninsula.

Before any new policy is introduced, you must consult properly with your workers. Clearly advise all employees of the rationale and business purpose behind such a policy. Any concerns raised must be taken seriously.

There should be no problem with random testing providing it is applied reasonably and fairly to all employees. Even when a policy gives the right to test, you will still need to show that you have implemented it reasonably and you have valid grounds for asking an employee to undergo a test. You cannot force an employee to take a test so you may need to treat refusal as grounds for disciplinary action and/or dismissal.

It is unusual for a failure of a drugs or alcohol test to be so serious that it amounts to gross misconduct, although this depends on the circumstances of each case. If the employee’s actions are so serious that the contractual relationship is broken - if, say, your employee has committed an offence that jeopardises the functioning of your business or the safety of your staff and the public – then the employee must be removed from the business and suspended on full pay while an investigation takes place.

If a member of staff fails a drug or alcohol test, you are justified in instigating disciplinary proceedings. You must make sure that the correct procedures are followed and the employee is given every possible opportunity to defend himself.

If it can be shown that the employee has committed an act of gross misconduct, any dismissal must be in writing, giving the employee his statutory right to appeal. Acts of gross misconduct usually lead to summary dismissal (without notice or payment in lieu).

If the misconduct did not constitute gross misconduct, then the employee would probably receive a warning. This would mean any further misconduct could result in dismissal.

Even if gross misconduct is proved, remember that no decision should be taken until a full investigation and disciplinary hearing have been conducted and concluded.

Kingston Smith LLP, the chartered accountant, and Peninsula, the employment-law firm, can advise owner-managers on their problems. Questions should be sent to Business Doctor, The Sunday Times, 1 Pennington Street, London E98 1ST, or faxed to 020 7782 5765. Advice is given without legal responsibility.