Mr Peters' dismissal followed an incident in which he was operating a machine that wound cable onto a wooden drum.
It was nearing the end of its run when, as he was about to use a pair of cutters to cut the cable to its required length, he dropped them to the floor.
After picking them up, the front of his overalls caught on a protruding screw and began to pull him in.
Mr Peters wasn't able to reach the machine's emergency stop button and his co-workers couldn't hear him over the noise of the factory, the decision stated.
After a few minutes, he was seen struggling by another worker, who stopped the machine.
He later reported the incident to a supervisor and after seeing a doctor, they told him it was likely he had fractured a rib.
Authority member Helen Doyle said that depending on the circumstances, a single act of negligence could sometimes justify a dismissal.
"Mr Peters' action was unsafe because he placed himself in the way of moving machinery and therefore in harm's way," she said.
"He should have stopped the machine before removing the cutters. There was a serious consequence because he was injured."
Ms Doyle said although the company alleged Mr Peters had breached the company's standard operating procedures, there were no relevant instructions for the machine.
"I do not agree that a fair and reasonable employer could have justifiably dismissed Mr Peters in all the circumstances at the time."
She subsequently awarded him three months wages of $4100 and $10,000 in compensation, minus 33 per cent due to Mr Peters' actions.
Comment was being sought from both parties.
