Yes - this always seems to be a problem with small employers. One of my clients has just been made redundant after 13 years service in a financial services company - to be told by her employer that he is not going to pay her anything, and that he will see her in Court. Which of course he will - very soon!
Thats's awful, I hope you're client does take them to court. I bet the company will offer to settle outside court right at the last minute.
I took an employer, who thought they were above the law to a tribunal many years ago and won.[:)]. As I was their HR manager at the time you'd think they'd have acted more sensibly! Thats why I decided to move more into Employment Law - so every cloud has a silver lining.