A law firm has warned employers to "plan and prepare" for a potential influenza epidemic following reports of the spread of swine flu.

Bircham Dyson Bell warned that if companies fail to take appropriate measures they could face legal action from employees who feel they have not been adequately protected.

According to the firm, companies could risk liability if they are found to have discriminated by treating staff inconsistently.

Marc Meryon, employment partner at Bircham Dyson Bell, said: "Legally we are operating in somewhat unchartered territory. However there are definite obligations which all employers have towards their workforce and by addressing certain key issues this will reduce the risk of potential litigation."

The company warned that companies could also find themselves facing damages if they fail to follow government guidelines.

It stated that they may face compensation claims from staff who were refused time off as a result of a flu pandemic.

An employee at Ernst & Young in New York was reported today (April 29th) by the company to have possibly contracted swine flu.