Alcohol abuse is costing the economy £20bn a year, according to a recent Government report. The findings by the Prime Minister's Strategy Unit revealed that 17 million working days are lost to hangovers and drink-related illnesses each year.

The abuse of drugs is also a growing problem and a study in the Health and Safety Monitor estimated that drug misuse costs industry £800 million per year. The problem looks set to rise, too, as drugs become more widespread in society.

But employers should be extremely careful when tackling what they see as drug or alcohol abuse. The effect of diabetes or epilepsy, for example, can sometimes make someone appear drunk. When dealing with a staff member who appears to be under the influence of drugs or drink it is safest to concentrate on whether they are capable of fulfilling their duties.

How drunk is drunk?

Make sure employees are clear about company rules on drinking. Alcohol tolerance varies from industry to industry and in some companies employees are encouraged to drink when entertaining clients. There might even be a bar on the premises. In other jobs, such as a driving instructor or company driver, there is a complete ban on drinking.

There is also a big difference between someone who drinks inappropriately on occasions and someone who is constantly drunk. The first category can usually be treated as a simple case of misconduct, whereas someone who has a drink problem is also likely to have long-term difficulties affecting their performance and attendance.

Draw up a policy

Don't wait for a problem to arise before deciding how to tackle it. Draw up a policy and disciplinary procedure on drug and alcohol abuse in the workplace and make sure all employees are aware of it.

The Advisory, Conciliation and Arbitration Service (ACAS) and your nearest Business Link can help and it's worth looking at policies on the internet. Search for companies in a similar business to yours for tailor-made tips.

The policy should include:

• the rules on drugs and alcohol in your company
• recognition that drug and alcohol abuse is an illness
• the fact that the policy applies to all members of staff
• details of help available

Proceed with caution

If you suspect someone is abusing drink or drugs ACAS recommends the following steps: