A Palmerston North plastics company has been fined $138,500 after a worker's hand was partially amputated when it was caught in a plastic extrusion machine.

Budget Plastics, a recycler and manufacturer of plastic products, earlier pleaded guilty to failing to ensure the health and safety of the staff member.

It was the first prosecution under the Health and Safety at Work Act 2015, introduced following the 2010 Pike River Mine tragedy in which 29 men were killed when an explosion ripped through the remote West Coast mine. Under the act, companies can be fined up to $1.5 million as opposed to $250,000 under the previous act.

Budget Plastics was sentenced in Palmerston North District Court on Tuesday and fined $100,000, ordered to pay the victim $37,500 reparation and an additional $1000 in costs to Worksafe.

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According to the court's decision, released to the Herald today, the incident occurred on the afternoon of April 6, 2016, when the man, whose name is suppressed, was standing on a wooden pallet feeding waste plastic into the extrusion machine by picking it up by hand out of a large plastic bag.

"After [the man] had picked most of the material out of the bag, there remained some scraps left in the bottom and he attempted to empty those by lifting the whole bag and tipping it into the hopper [a funnel]," the decision said.

"As he did so, part of the bag caught in the auger [drill] at the bottom of the hopper and began being dragged into it. [The man] became entangled in the bag, lost his balance and his left hand was dragged into the auger together with the bag."

He suffered horrific injuries to his hand, which was partially amputated.

Another worker saw what was happening and was able to turn the machine off and come to the man's aid.

He was immediately airlifted to Lower Hutt Hospital where he underwent surgery.

Worksafe had previously published guidelines specific to plastic extrusion. These include the need to fix guards to prevent operators reaching into moving parts, and placing protective mesh above the auger. They also require emergency stop buttons to be within reach of either of the operator's hands.

In its investigation, Worksafe found a number of failings including that the on/off switch and control panel were both some 2m from where the victim was standing. It also found that the extrusion machine was insufficiently guarded, with the operator required to manually push plastic into the auger.

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Shortly prior to the incident a health and safety expert had identified a number of health and safety failings within the factory, in particular noting the hazardous extrusion machine. Changes were in the process of being made when the accident occurred.

Judge Jim Large said the incident had been foreseeable.

"[T]here was an obvious risk of amputation to those using the machine. The victim partially severed his hand. There was potential for a more severe injury."

He assessed the company's culpability as moderate and found it was entitled to a 30 per cent discount for reparation, co-operation, remorse, remedial steps and its prior good record. Its early guilty also resulted in a further 25 per cent discount.

An affidavit from a chartered accountant submitted by the company found that anything more than a fine of $100,000 would cause significant difficulties for the business.

Judge Large said the case was not so severe as to justify a departure from the need to impose a fine within the company's ability to pay and fixed it at $100,000, along with the reparation and costs.

According to the decision, the victim has since returned to work on limited duties.

An article by law firm Chapman Tripp said the outcome of the case had been keenly awaited as it was the first successful prosecution under the new act and could have provided guidance.

"This opportunity has been largely missed," the article said.

"We think that the decision will disappoint many. The sentencing Judge did not fix a starting point but, rather, suggested a range. This is very surprising."

It went on to say it would expect to see fines against small businesses being reduced on a regular basis due to their inability to pay.

"We anticipate that as further cases appear in the courts, a selection of decisions will be taken to the High Court for it to establish some sentencing guidelines under the new regime. This will provide much-needed certainty."