More than 500 Red Lea Chickens employees have had their jobs terminated following the collapse of the chicken specialty chain.

Workers from the Blacktown processing plant and Sydney retail stores were told their jobs no longer existed in an email sent to them over Easter and now face a wait for money owed.

This comes as administrators of Red Lea chickens have admitted that business investors withdrew funding and have since launched an investigation into the company's affairs and the reasons for its financial failure.