If this is his first mistake, or even his first one in a while, give him thorough re-training, and hang on to a wiser, more experienced pilot. This has been the policy at any operator I've worked for, even otherwise not-so-good ones.
If, however, this is the latest in a string of occurrences with this individual, this history indicates he's a hazard and should be removed for the safety of your operation and clients.
And you can tell a good Chief Pilot by his/her willingness to stand up to management in cases like this.