Iris Bond, a secretary, claimed on the 10th day of the former Tory minister's libel action over Mr Fayed's "cash for questions" allegations that she twice saw her employer of 21 years put pounds 2,500 in envelopes for Mr Hamilton.
Ms Bond's evidence followed the testimony of Mr Fayed's former personal assistant, Alison Bozek, who told the jury she saw him put cash into an envelope for Mr Hamilton and twice herself put thousands into envelopes for him to collect.
Both women rejected an accusation from Desmond Browne QC, for Mr Hamilton, that they had entered into a criminal conspiracy to support Mr Fayed.
Ms Bond said she remembered one occasion when Mr Hamilton telephoned - after he and his wife had stayed at the Paris Ritz in September 1987. "Mr Fayed said, 'He is a greedy bastard. I know one of the things he's going to come for - he's going to want money'." She said that Mr Fayed then put pounds 2,500 in a white envelope.
On another occasion, Ms Bond said, Mr Fayed telephoned her and asked her to bring over pounds 5,000 in cash to Harrods, some of which was for "your friend Neil". Ms Bond, who described herself as a "lapsed Conservative", said Mr Fayed used to "kid" her about Mr Hamilton.
On a third occasion, she said, Mr Fayed gave her a brown envelope, which he asked her to leave downstairs for Mr Hamilton. "I was in the office when I saw Mr Fayed put the money in it - one bundle of pounds 2,500," she said.
George Carman QC, for Mr Fayed, asked for her reaction to Mr Browne's suggestion that she had entered into a criminal conspiracy to pervert the course of justice and commit perjury for Mr Fayed. Ms Bond said: "I'd say it is outrageous."
She told the court she had never been afraid of her boss. "I will say that he's not a saint. He is capable of eruptions. He can have a bad temper. But he forgets things very quickly. He doesn't bear personal grudges."
Mr Hamilton, the former Conservative MP for Tatton, is suing Mr Fayed over a Channel 4 Dispatches programme in January 1997, in which he claimed that Mr Hamilton had demanded and accepted cash payments, gift vouchers and a free holiday in the Paris Ritz in return for asking parliamentary questions on behalf of Harrods. Mr Fayed denies libel and pleads justification.
The trial continues today.