It is important to handle any disciplinary situation quickly, fairly and appropriately. Small businesses often find it easier to deal with an incidence of misconduct informally particularly when the issue is minor in nature. Hold an informal meeting to ensure that the employee understands why their behaviour has been deemed unsatisfactory and seek agreement/agree steps to ensure that the behaviour does not continue or recur.
If informal warnings have not produced the desired result and the unsatisfactory behaviour continues, the next step is to arrange an investigation by an impartial Manager. An investigation should include review of HR records and any previous warnings/issues that may have occurred, talking to other Managers with knowledge of the misconduct and interviewing any witnesses.
Should the investigation indicate that there is a disciplinary case to answer then you will need to invoke a formal disciplinary procedure. Most companies operate a 3-stage process: (1) written warning, (2) final written warning, (3) Dismissal. There is no legal obligation to start at the beginning of the procedure. The type of warning issued will depend on the seriousness of the offence.
In the event of an act of gross misconduct, i.e. an act of such a serious nature that it fundamentally breaches the contractual relationship between employer and employee then you have the right to dismiss the employee immediately without notice or pay in lieu of notice.