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How long ago exactly did this person start?
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Many thanks for your patience. It is a tricky situation because you could just reach a stand off where you refuse to pay them and they refuse to return the key and it could just remain that way until one of you budges. This is not ideal as it can go on indefinitely. I would say that the best way to do this is to arrange for a mutual exchange in person where this individual meets with you, perhaps in the office or at a neutral location and they hand over the key, getting their payment in return. I am not sure if you can arrange for a cheque to be drawn or for a bank transfer to be actioned there and then but at least try and offer a solution similar to that. If they refuse then so can you in terms of paying them. Furthermore if they do not return the key you can warn them that you will have to look at changing the locks and that such expenses will be deducted from their pay so that may prompt them to reconsider their position.
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Withholding pay is only an issue when it is ‘wages’ so in relation to employees. What you are doing is potential breach of contract but so are his actions. You cannot be penalised for what you are doing, just be ordered to pay what you owe him. This would not be theft as he is not intending to permanently deprive you of them, just hold them whilst you pay him what he is due. Hope this clarifies?
I am surprised the police have agreed to do this. 95% of the time they will leave it as a civil matter. You are free to use them if you can - it is free and there are no risks. But if he refuses and the police cannot help further then the above recommendations of a mutual exchange are the most reasonable solution
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