Is it legal for a boss to promote his girlfriend?

A friend of mine has worked for her company a long time and a year or so ago recommended another friend of hers for a job with the company. After a few months it became clear to everyone that her boss was dating her friend. They ended up moving in together and openly became a couple.

The assistant manager left the company recently and my friend's boss told her she would be taking his place. She was sent on training courses and the company paid for a couple of certifications she needed. Suddenly my friend got a warning for something she didn't do and she was told that her promotion was in question. The boss's girlfriend was given a new post on the same level as my friend and they were told that they would take on the assistant manager's duties between them. My friend trained the girlfriend to do the job and ended up doing most of the work while the girlfriend spent time with the boss.

Yesterday my friend found out that the boss's girlfriend has been promoted to assistant manager. She is totally distraught and doesn't want to go back to work. She feels betrayed by her friend and the boss.

Is it legal for the boss to promote his girlfriend when the promotion had been promised to my friend and she had been given all the training for it?

For information, when my friend was given her warning I told her at the time that it had not been carried out properly. Her boss did not tell her what the meeting was about and did not tell her she was entitled to have someone with her. She wasn't given a chance to explain what had happened (someone had logged into her PC as her, downloaded porn, taken a picture of it on her screen and sent it to the boss - my friend didn't know anything about it until the boss showed her the picture) and her warning was not given to her in writing. I told her she should have put in a complaint at the time.

She was never given a written contract and worked a lot of unpaid overtime. She even had holidays cancelled more than once meaning she lost money.

It's only a small company so they don't have an HR department or anything. The boss is completely in control. I think this is completely unfair and she should be getting legal advice but is it worth it? Has she actually been treated illegally?