P&O Ferries is facing a criminal investigation into its sacking of nearly 800 UK-based sailors with no notice last month.
The UK’s Insolvency Service said on Friday that it had “commenced formal criminal and civil investigations” into the sackings, which were heavily criticised by unions and politicians.
Dean Beale, chief executive of the Insolvency Service, wrote to business secretary Kwasi Kwarteng to confirm the move following “an urgent and thorough enquiry into the circumstances surrounding the redundancies”.
Kwarteng said that he and transport secretary Grant Shapps would “follow this matter closely as the investigations progress”.
The business secretary called in the Insolvency Service two weeks ago in response to the redundancies, which he said “appeared to have failed to follow” the proper process for notifying the government and trade unions.
The Insolvency Service has the power to conduct civil and criminal proceedings against people who have acted improperly during the life of a company or during an insolvency process.
P&O’s chief executive Peter Hebblethwaite has admitted that the company broke the law by failing to properly consult with unions.
P&O offered enhanced payouts to its staff to compensate for the lack of notice and said on Friday that all but one of its former crew had accepted the payouts.
Ministers have condemned the company, but admitted that they have few legislative options to force Hebblethwaite to back down.
P&O has refused to reinstate the nearly 800 crew, which it has said would “deliberately cause the company’s collapse” and endanger a further 2,200 jobs.
The ferry company has argued that it had no option but to completely remodel its crewing structure and replace its former employees with cheaper agency staff who will be paid an average of £5.50 an hour. This is well below the UK’s national minimum wage but legal because the crew work offshore.
Shapps unveiled plans this week to force ferry companies to pay the minimum wage by handing ports the power to refuse entry to ships. But the ports industry immediately criticised the idea, saying it should not be expected to “police” employment law.
P&O has indicated it is willing to pay the minimum wage if its rivals are also made to do so.
Shapps has separately written to the Insolvency Service, asking the body to consider the disqualification of Hebblethwaite, who he believes is “unfit to lead a British company”.
In a statement on Friday, Shapps said: “I have called for the P&O chief executive to step down after he shamelessly told Parliament he had knowingly broken the law, and it is right the company is held to account for its actions.”
P&O declined to comment.