> made it clear that failure to return the equipment would be considered theft

Is "please arrange for a courier to retrieve it" not the end of your obligations?

In a situation where everyone (including me) was acting reasonably, sure. But I was slightly gruntled from being pushed out for filing a safety report, and keeping it in my possession would have technically violated my new contract. Giving it to the police was clearly not stealing it and didn't require going out of my way to help them solve a problem of their own creation.