A company which makes pallets has been ordered to provide $50,000 to build a palliative care unit in Colac, in south-west Victoria, after being convicted of WorkCover offences.

The order was made in the Colac Magistrates Court against local firm CMTP Meade, after a 24-year-old man suffered leg injuries when he became trapped in a machine in November 2005.

It is the first time a Victorian company has been directed to contribute funds for a community project as a result of a WorkCover conviction.

WorkSafe spokesman Michael Birt says the decision is a good result for Colac.

"Penalties like this put money straight back into the community in a practical and useful way," he said.

"In this case it'll help people who are injured at work potentially, or hurt in car accidents or folk needing some sort of respite care."