The legal bit: If she lied on her application then she is guilty for misrepresentation and that is a criminal offence. Now you might think that a police officer might have difficulty keeping a straight face if you went in and complained but you certainly have grounds to fire her if you are someone who genuinely would not have taken her on had you known she smoked. You have the right to expect scrupulous honesty because of the core of trust between nanny and parent and she has breached that right. And if she has worked for you for less than a year you have the right to dismiss her for anything so long as it is not discrimantory, and certainly smoking would be an OK reason.
The personal bit: You have allowed this relationship to become way too personal. You are an employee first and foremost. Your nanny has a professional responsibility to you and it seems that this has been blurred far too much - she is not acting professionally (and I say this as one who has had nannies and AP's and I know that you do become friends and confidants.
The most concerning thing for me is whether or not she is emotionally equipped to look after your children. I say this for loads of reasons:-
- She lied about smoking - it is very immature to do this, and if you are going to do this when applying for a job, you have to come clean and 'fess up when you get the job. The fact that she didin't and then starts blithely tlaking about smoking to you just makes me wonder how much is going on upstairs (and how much respect she has for you).
- If she dismisses her responsibilities toward you so lightly regarding smoking, will she follow any of your rules?
- She is not being a very good judge of character - waxing lyrically about the stuff in her life and not even pickign up the vibes that these things are a concern to you and not really normal things to talk to a boss about
- If she gossips like this to you about her home life, what kind of thing is she gossipping about to her friends elsewhwere? You? Your home situation? Your taste in clothes? Whether you are a soft touch? Have a think about it.
- If she is not strong enough to stand up against her boyfriend, to what extent can you rely on her strength in any kind of situation which your children might be involved in?
You may feel as if you are mothering her but I wonder if she thinks you are a bit of a soft touch - if she's late for work would she apologise furiously and make the time up, or would her lip start to tremble whilst she launches into a disaster story about how she couldn't leave the house because of X,Y and Z
She may seem very vulnerable to you but you say yourself how blase she is - I think she is very streetwise, and you are not.....
You are unhappy with the situation. That unhappiness is not going to magic itself away. I think you should extract yourself sooner and not later because things will not improve. How are you going to feel when your children are talking and she is one of the most influential people in their lives? What kind of lessons will be learnt?
You can sack her and I think that you should. You can either tell her it is not working full stop, and not give a reason, tell her that the smoking concerns you and you feel you are struggling to regain trust in her and that it is therefore not fair on either of you to continue, or if you want to be nicer then tell her that you think you want a different type of nanny (live-in, more flexible, one who cooks from scracth, one who is a keen swimmer or fitness fanatic - basically anything you like so long as it is that she won't be able to do). When you tell her, give her a ready-prepared written reference that is very kind and raves about all her good points, and give her plenty of notice. It is up to you to decide if you offer her a continued role as a 'friend' or shoulder to cry on.
I am sorry if that sounds really harsh. But you cannot leave your children with someone who you simply do not feel right about. and that has to be the priority. Every parent accepts a few things that don't gel between them and the people who look after their kids, but the gaps here are pretty fundamental to the concept of trust, and I don't think you can compromise there.