Have you tried supplying the complete path to the FME.exe?
Maybe on that machine FME was not added to the PATH environment setting and therefor can not be found.
I can give that a try. There is definitely no FME entry in the environmental variables on the machine that is not working, however, I wasn't sure that was the issue, as there is no entry on my machine either, and it works fine. I will manually add an entry though, and see if that catches it.
If you type "path" and press enter on the command line, there should be a reference to the FME installation directory. If it isn't you'll have to add that directory to the path manually.
You may sometimes have to reboot your pc after for everything to pick up the path changes.
I've manually added the path to FME to the environmental variables on the machine with issues, and everything is now working. Thanks for your help.
Thanks this article was very useful