See, this is not question of what you have mentioned in HR policy, its matter a the policy an employee has signed at the time of joining. Is this written in his appointment letter or nature of employment that he/she can't start his/her own same business?
If, this is, you can take action under code-of-conduct norms.
26th February 2015 From India, Mumbai
Nowadays Employees are doing many businesses in parallel to their employment such as MLM, Website Hosting, Consulting etc... We cannot monitor all the employees at all times. You shall warn / act upon them in case if the employee is doing the business in office hours, using office phone / using office properties like internet, Laptop, vehicle etc., If she / he is doing the same business as your company. If his / her performance is not good....
26th February 2015 From India, Madurai
As a HR it's your responsibility to see that every Policy of your organization followed in proper manner.
If your policy clearly mentioned that employees should not do any kind of employment or business apart from this job ; you have to take a proper action according to your company norms.
Go through your Appointment Letter and check If this condition exist in your appointment letter format. If it is there, then you has a right to take action; as an Employee already signed that terms and condition.
Apart from this if you delay to take necessary action in time , you may held responsible in future for the same.
27th February 2015 From India, Mumbai