The standard here is if the owner has the dog off and no stock about, just remind them there are stock in areas and please be sensible. If they persist, or have dogs off around stock, they get a more severe warning, and the old ' well, if you weren't here, I might think he was worrying them and he might get shot' line. If the owner isn't present and the dog is mooching about, it gets lifted and leaded up and I usually go looking for them, or tie it to a fence post for a while (checking) and the owner usually turns up!
If they are in with the sheep and chasing but not killing or making them