If the co-workers signed something agreeing to the deductions, it is probably legal. An employer may not unilaterally deduct the cost of missing tools from an employee's paycheck (though the employer may sue them for the cost of the tools; the employer may also fire them, unless they have a contract, including union agreement, protecting their employment and laying out the grounds and procedure for termination). However, employees may agree to deductions, so the fact that your coworkers signed an agreement authorizing it probably means that the deductions are permissible and the employer can take the money out of their paychecks, unfortunately. They could bring the agreement(s) to an employment law attorney for him/her to review, to confirm whether this is legal, but there is a good chance that it is.