As you said that the mistress was employed by your business partner. I am assuming that she is a legitimate employee of the company. With this, if she is working for the company for morethan six months, she can be classified as a regular employee of your company. Now, infractions as you said were noted, you need to accord her due process under the Labor Code. You need to issue her notice to explain her infraction, this is a mandatory requirement given by the employer to an erring employee. She also have the right to be heard and defend herself in the infraction that she was charged. Afterwhich, if her written explanation and her defenses during the case hearing are unacceptable to you as employer, then you have to issue her a notice of termination.
Now, your partner should be informed about the rudiments of the law. At this juncture, being the majority stockholder, you need to discuss with him about the fate of her mistress, otherwise your business will be at stake...wherein your employees are developing grudges and these will grossly affect their performances detrimental to the operations of your company.