The small reservoir on the driver's side is for the clutch (only) -- only the RHD Pandas get a hydraulic clutch, so its not mentioned in the handbook. The rubber cone in there is the seal to keep moisture out. There is no level sensor on this little reservoir.
The brake fluid is in the bigger container on the passenger side. Unlike some cars (such as mentioned in previous answers) the wiring and float is not on the cap but actually connected to the bottom of the reservoir. Check the plug is attached here and that the wires to it have not broken where the go into the plug. So long as the fluid is between the min and max marks, all should be well. But if the warning stays on (and red light on dash too) then there must be something wrong with the float -- either obstructed as in 306maxi's reply, or broken - which I suspect is new reservoir territory?