Hi PP- I didn't read it that her pay was stopped for the 2 week holiday. I read it that they were taken as paid holidays and Theland is asking whether she should have been been paid as a suspended employee and allowed to carry the holidays forward, so should she have received 2 weeks' holiday pay in addition to her normal wages due on leaving.
I may have misunderstood though as it's not clear from the post ythough because of the sentence "her final monies are down to the tune of two weeks pay". I still think this means "outstanding holiday pay for 'unused' holidays, but it is ambiguous.
If she still took her holiday she wasn't available to attend any hearings in that time, so if she did have to take the 2 weeks as holidays rather than on paid suspension intuitively it seems she is no worse off than she would have been if she hadn't been suspended. So I don't think the employer seems to have done anything wrong. However I know that the law can often throw up surprises and maybe the parallel here is sickness when someone who is sick on holiday can get the holiday pay converted to sick pay and thereby save the holidays to a later date.