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Letting agent Amiee Knights, 30, resigned from her £40,000-a-year job after she was given a written warning after hurling the insult at a co-worker.
But at a tribunal, Knights claimed she didn't know what the word 'nonce' meant and had heard the insult on the hit BBC drama Peaky Blinders.
Some workers were threatening to boycott the annual shindig, while Salvatore Tona was trying to convince people to go. In the ensuing disagreement, Knights said to Tona: "F*** off, you nonce."
Tona later complained about the insult to their boss who issued Knights with a written warning and accused her of making 'verbal abusive comments'.
The tribunal heard that Knights had called another colleague a 'nonce' on the same day.
Judges ruled that Knights had been unfairly treated and found she had been disciplined without having the chance to give her side of the incident.
Judge Oliver Hyams cut Knight's compensation down to £7,708.56 ($9,800) - telling her she was 'skating on thin ice'.
Earlier this week, a bakery worker was handed a £3,000 payout after being sacked from her job of 20 years for under paying by 20p for a couple of sausage rolls.
Yvonne Hough, 54, handed over a pound for the savoury treats at The Bake-Away in Preston, but when her boss found out she had underpaid by 20p she called Hough on her day off and fired her for theft.
Employment judge Jennifer Ainscough criticised boss Lynn Pinder for not carrying out a proper investigation and for failing to allow Hough to appeal the decision to sack her.
She ruled that Pinder and The Bake-Away unfairly dismissed Hough and awarded her £3,061 ($3,890) in a payout.
Speaking after the tribunal, Hough said: "I just put the phone down on her. I thought 'you cheeky cow'. I'm so happy to have won the case because it's brought her down."
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