Celestina Mba worked for more than three years at the Brightwell Children's Home in Morden.
Her request to have Sundays off because of her Christian faith was initially accommodated by her employer, the London Borough of Merton.
However in 2010, the authorities changed their stance and she was left with the choice of having to work on a Sunday or leave the job.
Ms Mba, 57, tried to reach a compromise by offering to work nights or Saturdays, and taking less pay but this was rejected by her employer.
Her case is being supported by the Christian Legal Centre (CLC), which criticised the "intolerance" and "lack of willingness to make accommodation" for the Christian faith.
Andrea Williams, CLC director, said: "Celestina was a hard working employee who wished to observe Sunday. Her employers knew about this and agreed to it from the outset, yet later changed their minds. They forced her to choose between her job and her work.
"Surely it is possible to devise a rota system that respects and accommodates the Christian belief of employees especially where such a rota had worked successfully in the past.
"A public body like the London Borough of Merton should set the highest standards and not behave like this. No doubt Merton will spend considerable amounts of public money to resist this Christian lady."