small office restricting internet usage

The new starter has no rights under unfair dismissals legislation, so there is no risk to the employer in this case. The employee deserves immediate direct feedback. I'm not suggesting firing them, or holding this against them - Just make it clear straight away that internet facilities are for business use only.
 

I wouldn't imagine so
If they were using a phone to make calls all day as well as getting their job done it would not be unusual to tell them to cop on

stuart@buyingtolet.ie
 
In addition to having the worker agree with the co's AUP.

You could consdier a proxy server and web filtering solution.

You could then control both access to and the type of site / downloads etc accessed.

Needless to say details of all sites accessed and when could be used as ammo...

Many firms use these to restrict / control access.