The Small Firms Association has warned that businesses are facing a growing problem over e-mail and internet abuse by employees and that many companies could face legal action in the future.

SFA assistant secretary, Ms Patricia Callan, called on Irish businesses to adopt adequate safeguards to protect their staff, customers and the general public from this problem.

Ms Callan said that recent investigations into child pornography highlight the need for employers to be vigilant in making internet facilities available to staff for uses other than work.

"The duty of care rests with the employer to protect staff and customers from receiving information which they may find objectionable. The growing propensity of e-mail and internet abuse across society generally, is now finding expression in the workplace and is costing Irish business hundreds of millions a year in productivity alone," she said yesterday.

The SFA estimates that if employees misuse e-mail and other internet access for only 10 minutes each day, then the cost to Irish business is more than €300 million a year in pure productivity terms.

Employers can also be left open to even greater costs, such as libel actions, inadvertent entry into binding contracts, breaches of copyright legislation and exposure to sexual harassment and bullying claims, according to the SFA.

"The most important thing for companies to realise is that they will be held to be vicariously liable for the actions of their employees, even if these actions take place without the company's consent," according to Ms Callan.

The association says it is vital for companies to have a comprehensive e-mail and internet abuse policy, which clearly sets out rules for personal use, prohibits access to offensive material and sets out safeguards to protect the company's interest.

The SFA's own research established that 57 per cent of small businesses have no such policy eventhough they are legally liable if their employees misuse their information technology systems.

"While small businesses have actively embraced technology and have put e-mail and the internet on most desktops in order to achieve productivity gains, this empowerment brings with it a risk that many companies do not realise," Ms Callan said.