The couple, who face having to make a substantial compensation payment, said they were "devastated" by the ruling. The level of compensation will be decided at a June 8 hearing.
Jane Martin, 41, said she had worked for the 55-year-old pop star and Styler for eight years, cooking meals for them and guests including Madonna and Elton John. She said Styler grew unhappy after Martin became pregnant in 2005, making her work long hours and growing angry when she took time off work because of illness.
Martin, who accused Styler of having a "grandiose ego," left her job under disputed circumstances in April 2006.
In its ruling, the panel at an employment tribunal in Southampton, southern England, said Martin had been unlawfully dismissed by Lake House Estate, Sting and Styler's management company, and was a victim of sexual discrimination.
The judgment said that although Styler "had tried to distance herself from various unlawful acts and have them carried out by minions on her behalf, when the evidence is looked at holistically, her involvement is clear."
"She is without doubt the driving force manipulating others to perform her dirty work."
Styler said the couple planned to appeal.
"I am devastated that the tribunal's judgment makes this unjust and unfair attack on Sting and me," she said in a statement.
"Jane Martin was always treated well and generously as an employee, and we remain stunned at her actions and at the verdict of the tribunal."