First I think you have to see your GP/psychiatrist and get signed off long enough to sort your meds out and get back on a stable track. HR have effectively told you to do the same, and since you plainly cannot continue in this vein it is good advice.
Before you go off, make sure you’ve printed all the shit-mails from your manager.
Whilst you are off, and able to distance yourself, you might be able to have clearer conversations with ACAS or your lawyers.
I would want:
Clarity on this contract nonsense. If they started paying you in the October is it just an admin glitch that meant the contract didn’t get transferred?
Understanding of what happens if you go the grievance route vs. Discrimination. What is most appropriate in your circumstances.
If grievance is the correct way, do it. It is just a process. When you are feeling stronger you’ll be more able to see that. HR, cannot simply hand over a cheque because two employees are unable to work together and, in the nicest way, there are two sides to every story.
Of course, it could be the upside of the grievance is your boss is exposed for being a dick; something HR have suspected but been unable to prove before.
It’s easy for us all to give advice from our keyboards. I have been in your shoes and chose to fight, and won, but I don’t have MH issues. You have to address these first or you’ll be flattened by over-thinking every single point when if you were well you’d be better able to see the end game and how the process gets you there.