Step 1: Get a solicitor involved. Don't wait. Take his/her advice over and above anything you get here.
Step 2: Prepare to pay back the money. Discuss the mechanics of this with the solicitor. Down the road, he may need to demonstrate that this money comes from a willing friend, and is not leading to further hardship for someone else.
Step 3: Have the solicitor contact the firm, and handle the discussions regarding the payment, and the disciplinary process. Although your brother has acted in a manner that can be interpreted as gross misconduct, and most contracts of employment allow for immediate dismissal, this still needs to be put in proper context by his employer. In other words, they still need to communicate with him - providing the solicitor as a channel, and also as someone to accompany him to any meetings with the company will be helpful for both sides.
Step 4: The solicitor will need to talk to the Gardai, and explain what steps are being taken to fix the problem. The Gardai may decide to stop at a caution. This is more likely if the injured party (employer) is feeling good enough about the situation to allow it to go no further. Without them being happy at this point, the Gardai will not be able to let it drop.
In general: if your brother has never been in real trouble before, and if he can quickly address the problem, I believe this can be handled without going too far down the route of a criminal prosecution. He must be very upfront with everyone though, and obviously anxious (via his solicitor!) to fix things.
If your brother cannot afford to repay it all now, and if the loan from the friend is not available, he will need instead to agree a repayment schedule. Once again, the solicitor should be very useful for this.
Good luck to you and your family.