The company's owner, Maurice Hebberd, wrote to Mr Grant and gave him a second and final warning before allowing him back to work.
In early September the acting principal of Riwaka School wrote to Mr Hebberd and said she was concerned to hear Mr Grant was back driving.
She asked that a supervisor travelled with him or he was removed from the run altogether.
When Mr Grant returned from his afternoon run the day the company got the letter he was sent home and fired, Ms King said.
"There was no investigation carried out by the employer. Mr Grant was not given notice of any disciplinary proceedings and Mr Grant did not have a proper opportunity to provide an explanation,'' Ms King said in her findings.
The bus owner said he did not need to conduct an investigation because the matter was clear.
But Ms King said Mr Grant had an innocent explanation for the incident.
"It is very unfortunate that a number of people appear to have reached conclusions based on inadequate evidence.''
Although it was foolish for Mr Grant to take a camera onto the bus and then let children use it, he did not act with any untoward or maleficent motivation, Ms King said.
Hebberds Bus Services was ordered to pay Mr Grant $8500 in compensation, $3080 in holiday pay, $309.40 as reimbursement for unjustified suspension, and $2618 as reimbursement for the unjustified dismissal.