bussiness is bussiness, friendship is not.
from a bussiness point, she should be terminated or offered an early retirement if they have that there. you demote here to some lesser position, her resenment may very well affect her quality of work. nothing worse than having a resentfull emploee.
im not sure how bussiness operate where you are, adn im assuming it is not in the U.S.? what are the standards where you are? emploee for life like in japan? state subsidized for life like in parts of europe? or preformance based and for profit like here?
pass it up the line. if they dont want to fire her, your off the hook.
if its a for profit bussiness, fire her. if her abilities may put other people in jepordy, fire her. end of story.
when i was a manager for Levitz furniture, we used to pick one of the warehouse workers and fire them every month. usually the worst performer, even if he didnt do anything wrong.
why? becuase when he left...without any explaination....the rest of them steped up to the plate and worked harder. when i started, the turnover rate was close to 70 percent every 6 months. when i left, it was 30 percent and we were getting more work done with what we had. complacency is the productivity killer. people work harder when they are motivated, not when they KNOW they have a job.
hated it. still hate myself for doing it. its all about bussiness. do it or someone will push you aside and do it for you.