The Forum of Private Business (FPB) has warned its members in England that they have just 38 days to introduce a no-smoking policy.

The law, due to take effect on July 1, 2007, is aimed at protecting employees and the public from the harmful effects of second-hand smoke.

Senior membership representative Philip Moody said there are a number of things business owners and managers must do.

"The legal responsibility will be placed upon the business owner to make sure that his/her workplace becomes and remains smoke-free.

"No-smoking signs will be a legal requirement, staff, customers and other visitors must be made aware that both premises and company vehicles must be smoke-free, and any indoor smoking rooms must be removed."

Failure to display the required signs could result in fines up to £1,000 and failing to enforce the ban could land them with a fine of up to £2,500. Anyone who controls or manages smoke-free premises and vehicles is responsible for preventing people from smoking in them. That might be a difficult process, warns Mr Moody.

"If a customer is smoking, then there is the possibility that you may offend him/her and lose that person's custom. However, the consequence of inaction could be a costly fine, so a diplomatic approach must be taken. Draw the person's attention to the no-smoking sign, point out he/she is committing a criminal offence and remind the person that it is your responsibility to stop him/her smoking. If he/she persists, you have to ask the person to leave."

Employees can be disciplined for smoking on the premises or in work vehicles. Mr Moody advises talking to staff and incorporating the smoking ban into health and safety policies.

"Staff need to know that they, as well as the company, are at risk of a fine. Employees could face a fixed penalty notice of £50 or be fined up to £200 in court. If it is on paper, as part of company policy, then it is clear that a breach of the rules will lead to disciplinary action."

There will be a need to show that steps have been taken to meet the requirements, such as removing ashtrays.

The smoke-free law applies to virtually all enclosed and substantially enclosed public workplaces, and both permanent and temporary structures, such as tents or marquees.

Employers considering building an outdoor shelter should consider several things, according to Mr Moody.

"There is no legal obligation to build such a shelter for employees or members of the public but there could be consequences for businesses that do.

"Before you do anything, discuss plans with your local council. You may need planning permission and there could be other issues to consider, such as noise and litter."

There are exemptions from the law for certain types of businesses. For example, hotels, inns and hostels may designate guest bedrooms for smoking. Care homes and hospices may designate individual rooms and specialist tobacconist shops may allow people to sample tobacco on the premises.