Inspectors found staff at Complete Utilities Ltd were not fully trained to operate plant vehicles, and the work site was "chaotic and disorganised".
At Gloucester Crown Court, the firm was also ordered to pay costs of £27,000.
Employee Spencer Powles, 62, from Coleford, died 10 days after the incident on October 24, 2012.
He suffered severe injuries to his abdomen when a telehandler lurched forward, pinning him against a metal shipping container at the firm's Maisemore site.
A telehandler is a four-wheel drive machine, mostly used in farming and industry, which has an interchangeable bucket on the end of a telescopic arm.
Speaking after sentencing, health and safety inspector Caroline Bird said: "This terrible incident could have been avoided and Mr Powles would still be here today if Complete Utilities had provided proper training to staff in the operation of this telehandler.
"It is not acceptable to put drivers into vehicles that they have not previously operated, or without the necessary training by a qualified and competent instructor."
The BBC has tried to contact Complete Utilities Ltd for a response to the case and the criticisms of its operations.
A Gloucester-based firm has been fined £80,000 after a man was crushed between an industrial vehicle and a shipping container at work and later died.