Downing Street has warned P&O Ferries it is “looking very closely” at the legality of its decision to sack 800 seafarers.
The staff were fired without notice on Thursday and replaced with cheaper agency workers.
Demonstrations are being held at ports on Friday, with unions calling for a boycott of the company.
The Prime Minister’s official spokesman said the Government was looking to see if P&O has broken rules.
“We are looking very closely at the actions that this company has taken to see whether they acted within the rules,” the spokesman said.
“Once we have concluded that, we will decide what the ramifications are.
“Obviously there are a lot of valid questions in relation to existing contracts.”
He said companies should only make “extreme decisions to secure the future of their business if all other avenues have failed”, adding: “We don’t believe this was the case for P&O staff but we are looking into this very carefully.”
The Rail, Maritime and Transport (RMT) union said there should be a widespread public and commercial boycott of the ferry giant until the jobs are reinstated.
It called on the Government to demand P&O reverse its decision and negotiate with the unions.
If this does not happen, the Government should use powers to take over the P&O vessels, said the RMT, adding that ministers should remove any support for the company’s owner, DP World, including future contracts.
New laws are also needed to protect the long-term future of workers in the UK maritime industry, the union added.
The Transport Salaried Staffs Association and Fire Brigades Union joined the criticism of P&O.
Shadow transport secretary Louise Haigh, who visited the protest in Dover, said: “This was a despicable assault on workers’ rights, but British seafarers do not need meaningless platitudes – they need action.
“That’s why the Government must consider suspending licences and contracts held with DP World, claw back every penny of taxpayers’ money, and outlaw fire and rehire now.”
Nautilus International, which represents some of those fired, urged the Maritime and Coastguard Agency to “make sure the ships are safe” as the new crews are “unfamiliar” with the vessels and routes.
P&O told passengers sailings will be suspended “for the next few days”.
The company operates four routes: Dover to Calais, Hull to Rotterdam, Liverpool to Dublin, and Cairnryan in Scotland to Larne in Northern Ireland.
It advised those already at Dover and Calais to make their way to the check-in booths for Danish firm DFDS, but there were no such instructions for those at Hull, Rotterdam, Liverpool, Dublin, Cairnryan or Larne.
The firm insisted the decision to cut jobs was “very difficult but necessary” as it was “not a viable business” in its current state.
