If she's 65 this year then I think it's safe to assume that she has been drawing her old age pension since the age of 60 (or a married couple's pension is being paid).
Drawing one's pension is no barrier to working in retirement and (I think) no National Insurance would be deductable for a woman over state retirement age, regardless of marital status. Or, if I am wrong, no further state pension accrues despite the contributions deducted. :-(
However, the income should have been declared to the DWP, for them to assess what affect that would have on the pension payouts. If this was not done (cash in hand scenario), it might be advisable to rectify any arrears owed before launching into tribunal proceedings in case the employer tries to use this as a weapon against her case.
Even if she does not qualify for the employer's redundancy compensation scheme then state compensation rules still apply ('n' years' service = 'n' weeks pay in lieu of notice)
good luck