Recorded by Animal Liberation NSW, the footage shows contractors slamming the hens onto a concrete floor, and using a pole to pin them down.
In the video, one woman says: "I hate it when their heads come off" - prompting a fellow worker to laugh, adding: "It feels good, look."
The contractors, who were employed to 'ethically euthanize and dispose of stock' at Bridgewater Farm in Australia following an outbreak of Salmonella enteritidis, have been sacked - and the incident has also been reported to the police.
'Screaming in fear'
Animal Liberation, who said it was 'disappointed' at media coverage for not focusing on the fact the hens are legally gassed to death at 18-months-old, said: "As the hens are rounded up, their fragile bodies are subject to rough handling by contract laborers. The hens can be heard screaming in fear, as they are ripped from their cages.
"Due to being deemed 'useless', the workers have no regard for their welfare and can be seen bashing them against the cages, whilst regularly swearing at them for trying to escape. Further, the workers can be seen mocking and abusing the hens for amusement.
"They are thrown, hit, held up by their wings, and have their necks broken - all while other workers watch on and laugh. Consequently, many of the hens are left to suffer from fractured bones and ultimately die slow and painful."
Responding to the release of the undercover footage, Bridgewater Farm said in a statement it was 'appalled by the conduct of employees of an accredited third-party contractor'.
"This conduct is not condoned, approved or permitted in any way by the management.
"Bridgewater Poultry Farm will work with the Victorian government and all relevant authorities over the coming days to identify any shortcomings in the treatment of stock and the reasons for them."