The incident happened two years ago as an engineer was testing cutting machinery at the Moy Park plant at Anwick.
Alexander Stein, prosecuting for the health and safety executive, told Lincoln Crown Court that the incident occurred in January 2015 when engineer Barry Tye was carrying out checks on the tail cutting machine on the factory’s KFC production line.
Mr Stein said: “Because the machine wasn’t working properly he ran his finger over the blade to assess the blade.
“The line was restarted and he sustained a cut. He was taken to hospital for treatment and was off work for a day and then on light duties for three weeks.”
Mr Stein said that the production line should not have been restarted while an engineer was working on it.
Mr Stein added: “The prosecution contend that the system of work was inadequate. The system for isolating the processing line was regularly bypassed. There was inadequate training.
“There was pressure to keep the machinery operational and keep shutdowns to a minimum.”
He said other workers had suggested there were regular problems on the KFC line at the plant and there was always a rush to get the repair work done.
Moy Park Ltd admitted failing to ensure the health, safety and welfare of its employees at their Anwick plant as a result of the incident on January 7, 2015.
In addition to being fined £200,000, the company was ordered to pay £11,924 prosecution costs.
Mark Watson, in mitigation, said the company takes safety seriously and has won awards from the Royal Society for the Prevention of Accidents.
Mr Watson said: “This is a company that takes its responsibilities seriously in relation to health and safety, food safety and other regulations.
“The company’s standards are generally high although it accepts that in this situation more could have been done to reduce the risk to employees.
“There has been full co-operation with the investigation from the earliest stage.
“Detailed improvements have been made to address the issues of this case.”