the IAA would tell them to change their employment policy or withdraw their AOC.
The IAA will no more do that than the Catholic Church will sanction kiddie-fiddling priests, no matter how compelling the evidence. They know what's going on better than anyone, but they aren't in the business of dobbing in their own.
They won't even act on aviation matters, let alone employment law which is probably not within their mandate anyway.
You can forget that idea!