Victoria's recreational industry has been warned it must uphold basic safety standards after a County Court found a chairlift company guilty of negligence.

The Arthurs Seat Scenic Chairlift company was convicted and fined $110,000 over a 2004 incident in which an elderly woman's legs were crushed by a falling chair that had slid down a cable.

The company was facing a maximum fine of $250,000.

The company told the court it had seen an unknown person climbing on one of the chairs the day before the incident, citing possible sabotage.

But after initially pleading not guilty to one charge brought by WorkSafe, the company changed its plea to guilty the day before the trial.

The court was told only eight of the 64 chairs were properly secured, and a monthly scheduled safety check was more than three weeks overdue at the time of the accident.

WorkSafe investigators found that bolts securing the chairs had not been tightened correctly.

WorkSafe Executive Director John Merritt says the case sends a message to Victoria's recreational sector.

"Appropriate maintenance and safety systems, training and supervision are basic requirements of running these businesses.

"In this case, a lack of systematic maintenance was a major issue. It had serious ramifications for the injured people and their family, and others on the ride that day."