Miss Edmondson said NZCU human resources manager Louise Alexandra had pressured her into disclosing the photo circulating on social media.
Once NZCU executives obtained a copy of the photo it was distributed to recruitment agencies and Miss Hammond's new employer, Financepoint, with a request she be sacked.
Miss Edmondson, who had known Miss Hammond since she was 14 years old, added she later resigned from her job with NZCU because of the "deliberate breaches in privacy" which made her "feel unsafe".
She said she initially hid the truth about her resignation and felt "hurt and humiliated", while wondering "if I was honest about what I truly thought ... would [they] contact my future employer?"
Later in the afternoon, Hawke's Bay Today presented its written submissions to the tribunal requesting permission to publish the image of the cake.
Miss Hammond, who is representing herself, argued against publication and said she was before the tribunal in an effort to keep the image private and prevent further emotional harm.
"The media frenzy that has happened now ... to apply for a job and you Google Karen Hammond. I mean how far do I need to be stripped?"
Hawke's Bay Today's argument, which was also orally supported by The Dominion Post and Radio NZ, asked for an open judicial process, freedom of speech and the right for the media to report the evidence and exhibits presented before a public tribunal.
NZCU did not have position on the matter.
Tribunal chairman Roger Haines, QC, said the tribunal had to decide whether "the damage caused by publicity of the photo would genuinely outweigh any public interest".
"Miss Hammond is at risk of forever being established with that image - this could well have long-term consequences for her employment and future prospects," chairman Haines said when ruling against publication of the cake.
The case, before chairman Haines and tribunal members Wendy Gilchrist and Brian Neeson, continues today.
