Brendan Hayes, 32, broke bones in his left arm and both wrists after they were entangled in a prop shaft he was polishing at Propbrook Engineering.
An investigation by the Health and Safety Executive found an interlocked guard on the machine had been defeated, which meant workers carried out tasks in an unsafe manner, leading to the incident on 14 May 2014.
HSE prosecuted the company. At Birmingham Magistrates' Court, Propbrook Engineering, of Cato Street, Nechells, pleaded guilty to breaching its duties under the Health and Safety at Work etc Act 1974.
It was fined £12,000 and ordered to pay full costs (£1,178).
Investigating HSE inspector Clive Neil said: "Mr Hayes was using emery cloth to finish polishing the prop shaft in the computer numerical controlled (CNC) lathe. The machine had an interlocked guard which would have prevented him doing this work in the unsafe manner that ultimately caused his serious injuries, but this had been defeated. Polishing with emery cloth should never take place on CNC lathes.
"There was a disconnect between the company's risk assessment and the way tasks were actually carried out on the shop floor. This led to unsafe systems of work, which caused a relatively inexperienced employee to suffer serious injuries. It is only down to luck that Mr Hayes was not more seriously injured – amputations, even fatalities, have occurred in similar incidents."
HSE's free information sheet Accidents at metalworking lathes using emery cloths provides guidance on this subject.