A company has been told to "shove that down ya cake hole" after being forced to pay a humiliated former employee more than $168,000 for its "revenge" driven response to a rude cake.

The Human Rights Tribunal has ordered NZ Credit Union Baywide (NZCU) to pay former employee Karen Hammond $168,070.88 in damages for a breach of privacy which caused "severe" humiliation, loss of dignity, injury to feelings and harm to her future career prospects.

The woman's sister, Rach Hammond, took to Facebook to celebrate her sibling's legal victory.

She wrote on Hawke's Bay Today's Facebook page: "Proud of you sis! You stood up for your rights and studied so hard to represent yourself as no lawyer would take your case on! You showed them sis and I am soooooo (sic) proud of you! Shove that down ya cake hole NZCU."

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Check out our editorial on the cake case here.

Ms Hammond resigned from NZCU on March 23, 2012, and a week later baked a frosty dessert for her workmate, Jantha Gooding, whom she believed had been constructively dismissed.

The fruit and chocolate chunk cake, inscribed with "NZCU F*** YOU" and "C***S" in pink icing, was taken to a dinner party of 10 friends and an image uploaded to Ms Hammond's Facebook page.

Privacy settings on the page ensured only those who had been accepted as "friends" had access to the photograph.

In her evidence at the hearing in Napier last December, Ms Hammond said the cake was not only delicious but also "topical and hilarious".

On April 12, 2012, the NZCU executive team became aware of the cake, but because of the privacy settings could not view the image.

On that same day, Hayley Edmondson, who had been at NZCU for four months and was a friend and neighbour of Ms Hammond, was approached by human-resource manager Louise Alexandra and asked to take a screenshot of the cake.

After obtaining the image, Ms Alexandra rang at least four Bay recruitment agencies to warn against employing Ms Hammond, and sent them a copy of the photo.

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An effort was then made to terminate Ms Hammond's new employment at FinancePoint, and after business was halted for three weeks between the two companies, she decided her position was untenable and resigned on September 18, 2012.

Unemployed for 10 months, she endured several "humiliating" job applications that were well beneath her level of skill and experience, while believing her career was in "tatters" and suffering from anxiety.

Now working as a practice manager for AMP Solutions in Napier, she was "relieved and elated" at yesterday's decision.

"This case has consumed my life for three years. I had to represent myself at the tribunal because NZCU Baywide left me in a position where I could not afford a lawyer," Ms Hammond said.

"I lost employment opportunities, it caused major grief for my family, the financial impact meant my partner had to leave the region to find work that could sustain us, and the humiliation and stress. The personal impact has been huge."

Karen Hammond, baker of the 'offensive' cake. Photo / via Facebook
Karen Hammond, baker of the 'offensive' cake. Photo / via Facebook

She was awarded $98,000 for humiliation, loss of dignity and injury to feelings. A further $38,350 was awarded for lost income, $15,543.10 for legal expenses, and $16,177.78 for the loss of a benefit Ms Hammond might reasonably have expected to obtain.

The tribunal said the actions of the senior executives were "shameful" and the entire episode was marked by personal animosity against Ms Hammond.

It said there was an apparent desire from senior management to "exact revenge" for what was an act of kindness for a friend.

The tribunal ordered NZCU be restrained from continuing or repeating the interference or permitting others to engage in conduct of the same kind.

It forced NZCU to send a retraction of the April 12, 2012, warning about Ms Hammond alongside a copy of the decision to Red Consulting Group, Able Personnel, Adecco and Grow HR.

The credit union was also ordered to request that the email sent by Ms Alexandra and any screenshot of the cake be deleted.

An order was also made that chief executive Gavin Earle forward to all staff a retraction of his April 13, 2012, email and an apology to Ms Hammond.

NZCU chairman Iain Taylor and Mr Earle said the "severe" punishments were accepted, and they were genuinely sorry for the hurt, humiliation and distress caused.

They said there was considerable offence taken at what was expressed on the cake by the organisation and its staff, who were "upset and angry".

The credit union will not appeal. NZCU, with the Privacy Commissioner and at its own expense, will provide training about the Privacy Act 1993.

Employment lawyer Shan Wilson told NewstalkZB that the Employment Court last year was "very savvy" about Facebook and said things published to 200 friends on Facebook weren't private.

"So we've got a bit of a difference here," she said.

The "fanning out effect" that happened when something was posted to Facebook that friends then liked, commented on or shared was what made it different from something shared between two people in private.

She expected the tribunal would be faced with an influx of ex-employees who had been fired over comments or posts published to Facebook.

Ms Wilson said NZCU took "vindictive" and "malicious" action when it distributed the photo, but said the decision that the company had breached the woman's privacy was what ultimately led to the huge cost incurred.

"I wonder if it's almost the extra actions... that gets the tribunal so fixed on finding that this has been a breach so they can punish the later behaviour."

Privacy lawyer says there is a difference between looking at information, and distributing it

Privacy law specialist James Dunne of Chen Palmer told Radio New Zealand the tribunal's decision outlined the difference between looking at someone's Facebook page and accessing information from it and distributing it.

"It's not how the company got hold of the information it's what the company did with it then.

"This isn't someone posting something unwise on social media then complaining when their boss finds it. This is someone who's put something that in hindsight they might regret, but their old boss has found it and felt the need to broadcast it out to the world."

He said many breaches of privacy were unintentional, but in this case there was intent.

"It's pretty clear what happened was deliberate."

He said there had been "real damage, and real loss".

- With additional reporting by NZME. News Service