A: There are two different issues here for you to deal with, that he was declaring himself too ill to work when that potentially wasn’t true and the possible theft from your business.
While it is possible to be too ill to work on one job but capable of working at another this will depend on the nature of the illness and the work. If the declared illness would have prevented him from working for the customer in the same way that it allegedly prevented him from working for you then he has misled you about his circumstances.
What you need to do will depend on whether or not you paid your employee statutory sick pay and any contractual sick pay. What most employees forget is that by claiming sick pay they are declaring that they are entitled to receive this payment by virtue of being too ill to work. If this is not true then any payments they have received for this sickness period have been fraudulently obtained.
This is potentially a criminal offence and, as SSP is overseen by the HMRC, it could also constitute tax fraud. Contact your ex-employee and give them the option of repaying any sick pay they received to which they weren’t entitled and set out that if they do not do so you will have to report the matter to the relevant authorities.
The issue in respect of the theft is relatively straightforward and will depend on how you believe your ex-employee will behave. You can contact your ex-employee and say that you have discovered that equipment and chemicals are missing and see if he knows where they are in order to avoid you having to call the police in. If you are concerned about tipping him off just call the police now.