Members of management aren't supposed to date other employees, period. I have seen it happen a few times over the years, it usually ends badly. I have seen a handful of full time supervisors and managers fired for it. And I have also seen a few get away with it too.
Scratch -I have always liked the old saying (and it is old) "don't dip your pen into the company inkwell" !! However, relationships are going to happen. The Sexual Harassment and Workplace Violence policies spell this out more precisely. Based only by the thread starting post, the supervisor is creating an intimidating and hostile work environment for the employee. I handled so many of these cases when I was a manager that I pretty well had the policy memorized as I reviewed it with employees.
A supervisor and employee being involved in and of itself, is not something that would normally cause one to lose his/her job. BUT it creates a risk to the supervisor's reputation and career. I personally believe that it puts the power in the hands of the employee. If the relationship turns sour then the supervisor is put into a compromising situation. This is probably why the supervisor wants the employee to be transferred. Based on his alleged actions he would be disciplined and moved to a different area OR if they come to a mutual agreement that satisfies the employee, he may be allowed to stay. I don't recommend that course of action though.
It sounds to me like the supervisor isn't going to change his behavior if she asks him to stop. If it were me I would have already asked the supervisor to stop. If he failed to do so, I would go to HR with a shop steward and let them know what transpired. The employee should explain how she feels to the HR rep. The HR rep will do an investigation and once the investigation is complete, quick and definitive will be taken. As long as there is no escalation of violence, the employee should not have to worry about losing her job.