Ann,
I would still be very ****ed off too - she sounds like one screwed up b*&^% so best not to be around her probably. But a wrongful dismissal claim would be worth trying.
Rachael - that is an awful situation to be in. As the others suggested, I would go to a higher authority , if you are in a large enough organisation. Otherwise, if you can afford to and you don't really like the job probably taking all the sick leave and going is a good idea. But is it worth the hassle of trying to find another job?? It will make you think twice about telling people the truth in the next workplace.