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Yes it does. He is currently being charged with a crime and that has to be resolved first. If convicted, he loses his job. If not, then they can try and get him off the force for negligence. If he is fired for negligence first, then how can he adequately defend himself against the legal charges? The department firing him first basically sends the message that he is guilty of the criminal charges without the benefit of a trial.
That is why they suspended him with pay. He is innocent until proven guilty of the legal charges in a court of law. If he is acquitted, then the department can go through their procedures to determine if he gets to keep his job.
The law over-rides departmental policies.
The other driver failed to yield the right of way by crossing 2 lanes and directly into the path of the cruiser. If anything, I'd say the cop was only 50% at fault in this collision.
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