A tribunal's decision to award damages to an employee sacked for sending an "inappropriate" email shows the costs that firms could face unless they explain to staff what types of email and Internet use are allowed.

Bob Clarke, a sales manager at TXU Energi, was sacked for sending on an email deemed racist and sexist by his employer. However, Clarke said that the email was intended as a joke and was not meant to cause offence.

He added that the company had not previously informed him what types of email were allowed, a fact confirmed by three of his colleagues.

The tribunal decided that the email was inappropriate, but also that Clarke's dismissal was unfair, because he had not been informed of email usage policy, and had not been given a warning. The tribunal said the company should have used different disciplinary methods and awarded Clarke £32,000 in compensation for losing his job.

Michael Leftley, an employment partner at law firm Addleshaw Booth & Co, said that the lesson of this case is that to prevent inappropriate use of email, the Internet and even the phone, firms should put clear policies in place, and make sure that staff know about them.

"People could be spending an inordinate amount of time online, or could be accessing inappropriate material while at work," he said. "But you have to go through the proper channels to protect yourself. If you haven't got a policy in place you are stuck from a legal perspective."

Leftley added that in some cases firms may want to monitor staff to ensure that policies are being obeyed. However, he warned that firms must be careful not to breach privacy laws, and should refer to forthcoming guidelines from the government's Information Commission to find out what monitoring is permissible. "The legal position is that you have to be monitoring for a lawful business purpose, and you have to let staff know in advance," he added.

PolicyMatter, a joint venture between UK law firm Morgan Cole and software firm Extend Technologies, predicted that there will be a huge increase this year in similar unfair dismissal cases brought by employees and industry bodies. It advised companies to protect themselves by regularly informing staff about rules of acceptable conduct.

In some instances, technology can help to remind staff about firms' usage policies.

PolicyMatter offers a system that advises employees of current policy content and updates when they log in to the network. It also means that when staff use email or the Internet, a note appears on screen advising them that they are being monitored.

Have your say: reply to IT Week