well, since her contract will be ended in Sept.. of course don't 炒佢 &賠俾佢 unless the problem can't be resolved la.
since she hasn't yet been discovered by you that she's been smoking at home.. so, try to "pretent" you trust her only smoke on Sunday la... and tell her in a worry and a "mother" tone that you concern about the health of baby and tell her please don't smoke at home ar.. else you will be very sad. And try to say so far she and your family have a good relationship and since she already said she won't renew the contract .. so she will be leaving in Sept la... let's keep the good relationship till then.. don't ruin it la.
I think better don't use the "hard" way... try to use the "soft" way and see if she will take it more easily la.