Government officials knew about P&O Ferries’ plans to sack 800 crew in advance but did not challenge them, according to a leaked memo.
Department for Transport civil servants were told on Wednesday night of the plans to replace loyal workers with cheaper agency staff with no notice.
Yet they wrote the action would align P&O with “other companies in the market” and without it, “an estimated 2,200 staff would likely lose their jobs”.
A memo handed to the Sunday Times explained the action to colleagues. It said: “We understand that P&O Ferries have an intention to try and re-employ many staff on new terms and conditions or use agency staff to restart routes”.
It added: “Without these decisions an estimated 2,200 staff would likely lose their jobs. These changes will align them with other companies in the market who have undertaken a large reduction in staff.”
News then broke on Thursday when the staff were abruptly sacked in a video call, without the 30 or 45-day notice unions say is required by law.
The Department for Transport today insisted it was simply an “internal government memo” explaining “what officials had been told by P&O Ferries”, before ministers had the full facts.
But TUC General Secretary Frances O’Grady said: “This report shows his government sat on its hands and did nothing while hundreds of jobs and livelihoods were on the line.
“There was no attempt to challenge P&O on these unconscionable tactics – or even question whether these actions were legal.
“Ministers, from the prime minister down, have serious questions to answer. This is a national scandal. It has to be a catalyst for change on workers’ rights.”
Shadow Transport Secretary Louise Haigh added: “This bombshell letter proves that the government was not only aware of P&O ferries’ scandalous action - but complicit in it.
“They knew people’s livelihoods were on the line and they knew P&O was attempting to use exploitative fire and rehire practices. But they sat back and did nothing.”
Ministers have since voiced outrage, and the government is looking into whether P&O Ferries broke the law by failing to consult.
Downing Street warned of "ramifications” which could include stripping the firm of any government contracts or revoking its low-tax freeport privileges.
Chancellor Rishi Sunak lashed out at P&O’s “appalling” decision - after personally championing Freeports like that on the Thames which is owned by P&O’s Dubai owner DP World.
He told the BBC : “What we are seeing is appalling, the way they have treated their workers is awful, it’s wrong.
“Across government we are examining not just those actions and whether they comply with the regulations as they should have done, but also our own relationship with the company.”
It's understood Transport Secretary Grant Shapps' private office received a copy of the memo on Thursday morning, just before the news became public.
But Mr Shapps did not see the memo because he was taking Transport Questions in the House of Commons at the time, sources said.
Earlier No10 had insisted the news was kept to a tight circle of officials in the Department for Transport due to commercial confidentiality.
The PM’s official spokesman said: “I don’t know exactly when the Prime Minister was informed”.
A Whitehall source fumed: “Officials appear to have initially bought the P&O Ferries line that this was essential to save the company from imminent collapse.
“But talk of agency staff and getting operations up and running in just ten days should have set alarm bells ringing that this was no ordinary redundancy announcement with a proper consultation process.
“Ministers were incandescent when they were made aware of what was taking place and intervened as quickly as possible.”
A DfT spokesperson said: "This was an internal Government memo which, as standard practice, outlined what officials had been told by P&O Ferries shortly before their announcement was made.
"This was sent before Ministers were advised of the full details and as soon as they were informed, they made clear their outrage at the way in which P&O staff had been dismissed.
“It is clear from the memo that our immediate priority was to work with unions to ensure workers’ rights continue to be protected and the Transport Secretary has urged the company to sit down with workers and reconsider this action."
