Minister loses payout battle.
Donna Easter, aged 33, said the MP telephoned her after she was involved in a dispute with her neighbours and told her it would be better if she left.
Mr Hain took single parent Miss Easter on a work experience placement in 1993.
She later became fulime staff in his Neath constituency office, the Cardiff tribunal heard.
After a dispute with her neighbours ended in civil court action she went on sick leave at the beginning of this year, needing counselling and tranquillizers.
But when she attempted to return to work she was told she was being made redundant because of office reorganisation.
Miss Easter, of Briton Ferry, West Glamorgan, told the tribunal she was paid pounds 15 on a part-time basis so that it did not affect her single parent benefit. But she also received extra payments for expenses.
A statement from Mr Hain's constituency office said: "He had no alternative but to make her redundant after she had been bound over to keep the peace by Neath magistrates four months ago following a bitter dispute with her neighbours.