I'm not a witch, but one of my employees made a comment in front of others in conversation with me that implied I have some interest in witchcraft. I found myself cringing at the thought that Christian family members and employees might treat me less positively as a result.
I suppose I got a taste of the difficulties facing people who practice witchcraft and have family and coworkers and friends who would disapprove if they knew. I had been aware of this, but it is different to experience it for yourself.
I think it is probably easier to be open about atheism than it is to be open about witchcraft.
Obviously, you are the boss since you used the phrase, "my employees"
What you described was insubordination, religious intolerance and an attack on the business with all of its employees. Surely, your company has rules about that. Perhaps "Mr. Nemisis" needs to be reminded of that.
The place and context of the remark is also important. You need to temper your remarks to accommodate the intricacies of the situation, but if in any way, it was at a business function, it should be documented and addressed in the business.
If it was at a family function, then the addressing should be done away from the business on a more casual basis such as over coffee. Here, the message should be "lets do a reset" and explain your reasons instead of having a "get on board" message which is done in the business.
In either case, for your protection I suggest that you completely document what you did, and the response of the employee
In either situation, I would include an explanation of terms. Atheism is a thought process, and by definition expresses the belief of no God. Perhaps the term "agnostic" may be better because it expresses uncertainty about any god. It is also a thought process.
Witchcraft, at which you expressed your revulsion about is different because it involves the practicing of certain rites, and that is by definition, a religion.
If it happens again, then the business is an appropriate place. There you can carefully state your displeasure, and have a way for the employee to successfully move on without recriminations by finding a new place of employment because the next time it happens, the meeting that will be a forced choice