A Melbourne logistics company has collapsed just days before Christmas, reportedly telling its 120 workers it cannot afford to pay them for the past week as it goes into receivership.

Key points: Fastline International specialises in online, wholesale and retail warehousing

Fastline International specialises in online, wholesale and retail warehousing The union says the company wants to re-employ some of the workers on lower conditions

The union says the company wants to re-employ some of the workers on lower conditions The collapse follows national freight company Redstar Transport going out of business yesterday

Fastline International, which is based at Derrimut in Melbourne's western suburbs, told staff on Thursday that they had lost their jobs and should not come in to work today, according to Jenny Kruschel, the national secretary of the CFMEU's textile, clothing and footwear section.

The move has stunned workers, who the union says are owed "millions" in entitlements, including annual and long service leave, superannuation and unpaid wages.

"They were told that basically they're not to come to work … they'd lost their job and there was no money to pay them, and the company's gone into liquidation," Ms Kruschel said.

"It's really hard on these workers because they're just about to stop for Christmas for a couple of days," she said.

"They've lost their job, they're worried about how they're going to pay their rents, how they're going to pay their mortgages and how they're going to get through Christmas."

The union claims workers are owed "millions" in unpaid entitlements. ( ABC News: Darryl Torpy )

Fastline International specialises in online, wholesale and retail warehousing

Australian Securities and Investments Commission records show Fastline International is a subsidiary of the company Global Fashion Service, which is registered in Melbourne.

The union is accusing Global Fashion Service of moving its assets out of Fastline International and into another company.

"The company's separated the workers from their business and really they've just set up another business model," Ms Kruschel said.

"They say they're going to employ some of the employees without the EBA, or without the conditions that the workers who were made redundant currently have."

The ABC contacted Fastline International for a response but was directed by Global Fashion Service to contact the specialist insolvency accounting firm, Dye & Co.

The ABC has also contacted Dye & Co.

The union will meet again with workers on Christmas Eve.

"We're calling on the directors of all the companies that are linked to really pay these workers their money," Ms Kruschel said.

Fastline's collapse follows national freight company Redstar Transport going out of business on Thursday, putting about 400 people out of work.