It is thought that he caught a lever as he climbed out of the cab and was crushed against the vehicle when the bucket on the front was raised.
Amin Qabil, from Afghanistan, was using the skid-steer loader to move rubbish when the incident happened at Blackburn Skip Hire Ltd on 21 August 2010.
The company and its owner, Zarif Mohammed, were prosecuted by the Health & Safety Executive (HSE) after an investigation found the vehicle was unsafe to use and that Mr Qabil had not received any formal training.
Preston Crown Court heard that the firm had bought the second-hand loader at an auction in Doncaster, but had failed to ensure its safety features were working when it used it at its warehouse on the Kensulate Park industrial estate.
The restraint bar had been disabled, which meant the controls could still be operated when no one was sitting in the cab. The minimum engine speed had also been increased, and a fault meant the vehicle could reverse unexpectedly.
Mr Qabil’s body was discovered just after midnight after the owner of a neighbouring business noticed the gates to the site were still open. He had suffered massive rear head injuries. The HSE investigation concluded that the most likely explanation for his death is that he caught a lever as he climbed out of the cab and was crushed against the vehicle when the bucket on the front was raised.
Blackburn Skip Hire Ltd and Zarif Mohammed both pleaded guilty to single breaches of the Health and Safety at Work etc Act 1974 and the Provision and Use of Work Equipment Regulations 1998.
Blackburn Skip Hire Ltd, of Lower Hollin Bank Street in Blackburn, was fined £60,000 and ordered to pay £19,000 in prosecution costs.
Zarif Mohammed, 36, of Leamington Road in Blackburn, was ordered to carry out 160 hours community service and pay costs of £1,000.
Speaking after the hearing, HSE inspector Matt Greenly said: “Amin Qabil’s life was brought to an end after he suffered horrific injuries caused by a vehicle that should never have been in use.
“Blackburn Skip Hire should have made sure the skid steer loader it bought at auction was safe to use, and that workers were properly trained. Instead vital safety features had been disabled and lives were put at risk as a result.
“The company and its owner had a legal and moral duty to look after the safety of Mr Qabil, but sadly their failings led to him losing his life.”