The continuing plight of Karen Hammond has received widespread publicity because of her less than savoury baking.

Hammond worked for New Zealand Credit Union Baywide (NZCU) until she resigned in March 2012.

Five days after quitting, Hammond baked a cake for a colleague which had "NZCU f... you" and other derogatory terms written on the icing. She also took a photo of the cake and posted it on her Facebook page. Hammond had just 165 Facebook friends and intended for the photo to go only to them.

Unfortunately for her, the human resources manager at NZCU found out about the cake. Because the photo was not publicly accessible, NZCU apparently required an employee, who was Facebook friends with Hammond, to log on to Facebook and provide access to the photo.

The human resources manager allegedly saved the image and then proceeded to distribute it among recruitment agencies, advising them against assisting her.

Hammond claims that NZCU tried to destroy her career.

She says she had to resign from a subsequent position, which required her to deal with her former employer, because NZCU refused to deal with her and put pressure on the new employer.

Hammond has brought a claim in the Human Rights Review Tribunal, arguing that her former employer breached her privacy by accessing her account through one of its staff and then distributing it to recruitment agencies, possibly making her unemployable.

The chief executive of NZCU, Gavin Earle, admitted during the hearing that the company had made mistakes and accepted it had been 'irrational' to press for Hammond's dismissal from her new employer on the basis she was a commercial risk.

The tribunal has concluded its hearing and a decision will be released in due course.

There are two key lessons in the Hammond case. First, it is unrealistic to expect what is posted on social media will be viewed only by one's friends. People are well-connected and social media content is difficult to control. Once something has been posted, it can easily come to the attention of an employer (or former employer).

The other key point is that employers can get themselves into legal hot water by actively seeking to harm the employment prospects of former employees.

Normally employers are more restrained than NZCU and wait until they're asked before making unfavourable comments about a former employee.

However, employers who stray from the truth when giving a reference can also find themselves in difficulty, so it is well worth reminding readers about a leading English case between Guardian Assurance and Graham Spring.

Spring was employed by Guardian as a sales director and office manager. However, he was dismissed without explanation.

Spring proceeded to apply for a job with a competitor and Guardian was called upon to give a reference. Unfortunately for Spring, the reference was far from accurate.

It described him as "a man of little or no integrity and could not be regarded as honest" and stated that he "consistently kept the best leads to himself with little regard for the sales team that he supposedly was to manage".

It also said that Spring left the company "owing some £12,000 in funding which to date has not been repaid".

Spring was unsuccessful in the job application and had no luck finding alternative work.

Naturally he was far from happy about Guardian's role in effectively destroying his career. He began proceedings, which went all the way to the House of Lords.

The House of Lords came down on the side of Spring. It stated that an employer who gives a reference has to give an honest one and that they have a duty of care towards former employees. Guardian did not live up to this duty.

The lesson from Spring's case must surely be that employers who give references about former employees needs to check the facts carefully and keep it honest. Honesty is generally the best policy.

What will come of NZCU's decision to actively notify recruitment companies about Karen Hammond's cake and its attempts to bring about her dismissal, however, remains to be seen.