I understand this type of behavior fairly well as I am married to a conflict-avoider myself. My H also has issues with his mother.
Quote: He has especial difficulty confronting women.
Let me state the obvious here. OW is a woman. So how does H confront her about this employment issue? Think of the conflict soaked scenarios your H must have tossed around in his head while pondering over this issue of approaching her.
I'm very much in empathy with you. It's a sticky situation - but one in which I believe you have the upper hand.