P&O Ferries has been blasted in an scathing letter by the UK Business Secretary who has warned the company they could be facing "criminal" offences and an unlimited fine for laying off hundreds of workers.
Kwasi Kwarteng told the firm that it acted "appallingly" in its treatment of its staff.
The letter, also signed by business minister Paul Scully and addressed to chairman Robert Woods, accused P&O Ferries of being happy to receive a pay out from the British taxpayer from the Furlough scheme but unwilling to abide by employment rules.
P&O Ferries sacked 800 workers over a video call on Thursday to replace them with agency crews.
The UK Government is now looking into whether it broke the law.
Downing Street today warned of "ramifications" and warned it was "too early" to say whether the firm acted lawfully by replacing workers with agency staff.
Asked by the Mirror if it broke the law, P&O today insisted it followed "standard industry practice" by offering "enhanced severance terms" to those affected and "properly compensating them for the lack of warning and consultation.".
The Business Secretary's letter stopped short of saying the company would have to pay back £10m of furlough cash it received during Covid.
But it warned: "It is particularly depressing that this should happen given the millions of pounds of British taxpayer support P&O companies received from the furlough scheme.
"It cannot be right that the company feels tied closely enough to the UK to receive significant amounts of taxpayer money but does not appear willing to abide by the rules that we have put in place to protect British workers."
Firms must by law notify the Insolvency Service - and consult with staff - if they plan to make more than 20 staff redundant at one site.
If there are 20 to 99 redundancies at a site, this must be at least 30 days before the first dismissal. If there are 100 or more, it's 45 days.
A union source told the Mirror union officials are "99% sure" the action was unlawful, in their opinion, and are looking into the situation.
Chris Deeley of JMW Solicitors said P&O's actions "seem to be flagrant breaches of employment law" which would trigger "incredibly expensive" enhanced severance packages.
The blistering letter said: "Failure to meet the notification obligation is a criminal offence and can lead to an unlimited fine.
"We note that in this case P&O Ferries appears to have failed to follow this process.
"We have therefore asked the Insolvency Service to look at the notification requirements and to consider if further action is appropriate.
"In the meantime, we would like to understand why you think these rules do not apply to you."
The letter demanded answers to a series of questions about what had happened and said the Insolvency Service would look at whether rules around the processes that employers must follow if they are making large groups of staff redundant had been followed.
Protests have been held across the country against P&O Ferries after its "appalling" decision to sack 800 seafarers as the company issued a fresh defence of its decision.
Demonstrations were held at ports in Dover, Liverpool, Hull and Larne in Northern Ireland and outside the London head office of owners DP World amid growing anger at the sudden sacking of staff with no notice.
Attempts are being made to replace them with cheaper agency workers, but the company is facing a backlash, including calls for a boycott of its services.
A spokesperson for P&O Ferries said: "We know that for our staff this redundancy came without warning or prior consultation, and we fully understand that this has caused distress for them and their families.
"We took this difficult decision as a last resort and only after full consideration of all other options but, ultimately, we concluded that the business wouldn't survive without fundamentally changed crewing arrangements, which in turn would inevitably result in redundancies.
"We also took the view, in good faith, that reaching agreement on the way forward would be impossible and against this background, that the process itself would be highly disruptive, not just for the business but for UK trade and tourism.
"We have offered enhanced severance terms to those affected to properly and promptly compensate them for the lack of warning and consultation.
"The changes we've made bring us into line with standard industry practice."
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