Richard Dyson, 38, and his partner Simon Midgley, 32, died in the blaze at Cameron House by Loch Lomond in December 2017.
It started after night porter, Christopher O’Malley, emptied ash and embers from a log fire in the hotel reception into a plastic bag which was placed in a cupboard containing cardboard, kindling and newspapers – and electrical installation apparatus.
O’Malley admitted breaching the Health and Safety at Work Act at Dumbarton Sheriff Court on December 14 and he was sentenced on Friday to a community payback order to carry out 300 hours of unpaid work within 18 months.
In his sentencing statement, sheriff William Gallacher said the fine for the hotel was reduced from £750,000 because its owners tendered an early guilty plea.
Sheriff Gallacher said: "Your acts on December 18 caused a fire to start in a cupboard in Cameron House Hotel.
"The fire developed from that cupboard and spread to many parts of the building, which had to be evacuated.
"Some guests managed to do that with relative ease, some found it more difficult crawling along corridors to avoid smoke, others had to be rescued by ladder, no doubt some of those who experienced these traumatic events will remember it for a long time to come.
"Two others were unable to escape from the fire and tragically lost their lives."
Mr Midgley and Mr Dyson died as a consequence of the smoke and gas inhalation.
CCTV footage from inside the hotel shows staff noticing smoke coming from the cupboard just before 6:40am that morning and, shortly afterwards, the fire takes hold and quickly spreads. After 8am it was discovered that Mr Dyson and Mr Midgley were missing - and firefighters recovered them from the second floor.
In an incident three days earlier, O’Malley had been told not to put ash into plastic bags.
More than 200 guests were evacuated from the building during the fire, including a family of two adults and a child who were rescued by ladder and taken to hospital. They were later discharged.
The court heard the hotel operator had been warned of the “unacceptable” risks of keeping combustibles in the cupboard following a fire service audit in August 2017, and the general manager had then highlighted the issue to staff.
Cameron House Hotel admitted it failed to have in place safe systems of work in respect of the removal and disposal of ash and embers from the hotel's solid fuel fires and maintenance and emptying of metal bins in the rear yard for storing ash and embers.
It also admitted it failed to keep cupboards containing potential ignition sources free of combustibles and failed to ensure employees were provided with the necessary instruction, training and supervision in respect of the safe removal and disposal of ash and embers from the hotel's solid fuel fires.
The sheriff continued: “In essence, the night porter had never been told how he should gather the ashes and embers and where he should put them.”
In 2016, fire risk assessors also made a clear recommendation that a written policy should be developed - made available to all employees - after being instructed by the hotel to make an assessment of their fire risks.
The preparation of writing up procedures was never delegated by the deputy duty manager of the hotel because there was not perceived to be an issue with the removal of hot ashes.
And in 2017, the same fire assessors highlighted that the written procedure had still not been implemented. The situation was challenged by the resort manager and risk and safety manager and the report was revised, leaving staff members to deal with matters as they thought best.
The sheriff also said the other “essential and catastrophic” factor in the fire spreading was that the cupboard in which the ashes and embers were placed contained kindling, cardboard and newspapers - and electrical installation apparatus.
A multi-agency investigation was launched involving police, the Scottish Fire and Rescue Service (SFRS) and West Dunbartonshire Council took place, overseen by the Health and Safety Investigation Unit of the Crown Office.
Alistair Duncan, head of the Health and Safety Investigation Unit, said: “The failings on the part of Cameron House Resort and Christopher O’Malley led to the deaths of Simon Midgley and Richard Dyson.
“The tragic loss of these two lives has had a devastating impact on families and friends.
"These convictions and sentences are the culmination of a thorough and technical investigation carried out by Scottish Fire and Rescue Service, West Dunbartonshire Council and Police Scotland, overseen by the Health and Safety Investigation Unit of COPFS.
“This incident should serve as a reminder to other companies that failure to implement the necessary fire safety measures can have terrible consequences.”
Stuart Stevens, Assistant Chief Officer of the SFRS said: “We extend our deepest sympathies to the families and friends of Richard Dyson and Simon Midgley and all of those affected by the tragic event at the Cameron House Hotel on December 18, 2017.
“This needless loss of two lives could have been prevented and this sends a very clear message to businesses and organisations across Scotland that fire safety must remain of highest importance, and that all appropriate measures must be taken to protect the public and their staff.
“The requirement to act on our advice should not be underestimated and our enforcement officers will continue to support and advise those responsible for the safety of their premises wherever possible.”
Detective Inspector Stuart Grainger from Police Scotland said: "This has been a lengthy and difficult investigation for everyone involved.
"We'd once again like to offer our sincere condolences to the families and friends of Simon Midgley and Richard Dyson, who tragically lost their lives on Monday, 18 December 2017.
"While nothing will ever diminish the pain of their loss, we hope that the conclusion of this case brings at least a small measure of comfort."
Peter Gray QC, representing Cameron House, said the failings were not deliberate breaches but occurred "as a result of genuine errors".
He said an absence of formal procedures for dealing with ashes and embers gave staff the opportunity to improvise, and he added the resort extended its "deepest sympathies" to the families of Mr Midgley and Mr Dyson.
Mr Gray said the hotel takes its duties to ensure the safety of its guests extremely seriously.