Thomas Bird, from Lichfield, Staffordshire, was working as a labourer for UK Demolition Services Ltd on the old cinema site on March 17 2010.
Bird, then 19, was loading debris into the selector grab of a hydraulic excavator when it swung round and hit him, crushing his right arm against the building.
He was airlifted to hospital but surgeons were unable to save his arm and it was amputated below the elbow.
An investigation by the Health and Safety Executive found the operator of the excavator failed to switch off the ignition when he left the driver’s seat.
He lifted the side arm located by the driver’s seat but while getting out of the vehicle he caught his coat on the side arm. This pulled the side arm back down, which in turn engaged the hydraulic power and then allowed the excavator boom to swing into Bird.
Huntingdon Magistrates’ Court heard the firm had failed to put in place arrangements to ensure construction plant did not inadvertently move and put ground workers at risk of being struck.
UK Demolition Services Ltd admitted two safety breaches and was fined £4,000 for each breach and ordered to pay £3,500 costs.
HSE Inspector John Berezansky said: “Construction work including working around and near machinery is a high risk activity with significant numbers of major and fatal injuries.
“Implementing appropriate standards with good planning, communication, training and cooperation is essential. In this case the defendant failed to put these arrangements in place including following the manufacturer’s own guidance in respect of preventing the excavator from moving inadvertently.
“As a result of these failings, Thomas Bird will now have to live and manage the rest of his life with the use of only one arm.”