The Darwen firm was prosecuted by the Health and Safety Executive (HSE). Graham Readfern, a 56-year-old subcontracted employee from Bacup, was killed after falling from the roof of a partly completed loft conversion project in January 2012.
A HSE investigation revealed the scaffolding used to protect workers from a fall while carrying out roof work was not sufficient.
Minshull Street Crown Court heard that Newhey has been contracted to carry out a large loft conversion on a property in Chorlton, Manchester.
Mr Readfern had fallen from the roof of the dormer conversion but was not caught by the scaffolding as it had not been built high enough to stop someone falling to the ground some five metres below.
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He had been carrying a roll of roofing felt onto the newly built dormer window when the ladder he was using collapsed and he was catapulted over the scaffold handrail into a neighbouring garden.
Mr Readfern died of his injuries 17 days later.
Newhey pleaded guilty to two breaches of the Health and Safety at Work Act 1974 and a breach of the Work at Height Regulations 2005.
HSE Inspector Matt Greenly said: "This was a large loft conversion job which required the company to increase the height of the original roof to fit dormer windows, although the scaffolding was adequate for the start of the works, once the new and much higher dormer windows were built by Newhey, they should have increased the height of the scaffolding.
"This simple lack of attention to the progress of the works led to Mr Readfern working outside of the safety provided by the original scaffold and sadly suffering a fall which resulted in his death.
"It is clear that had Newhey simply raised the scaffold height, at a cost of only a few hundred pounds, Mr Readfern would never have suffered a fall of this scale and would more than likely still be with his family and friends to this day."
(LM)
