Many of those fired were refusing to leave ships, leading to security guards with handcuffs being deployed to remove them.
The ferry operator, bought by Dubai-based logistics giant DP World in 2019, insisted the decision to cut jobs was “very difficult but necessary” as it was “not a viable business” in its current state.
Rail, Maritime and Transport union (RMT) general secretary Mick Lynch said: “We are receiving reports that security guards at Dover are seeking to board ships with handcuffs to remove crew so they can be replaced with cheaper labour.
“We are seeking urgent legal action and are again calling for the Government to take action to stop what is fast turning into one of the most shameful acts in the history of British industrial relations.”
Labour MP Karl Turner posted a photograph on social media showing the captain of Pride of Hull addressing workers on the ship.
Mr Turner wrote: “They have support right across the city of Hull and the rest of the country, and are determined to stay on board for as long as it takes.”
Shadow transport secretary Louise Haigh said employers “cannot be given free rein to sack workers and replace them with agency staff”.
Conservative MP Huw Merriman, who chairs the Commons Transport Select Committee, urged the Government to do “everything it can to ensure that this appalling employment transaction cannot be completed”.
He added: “Concern remains as to whether this is lawful.”
Transport Secretary Grant Shapps said his officials “will be having urgent discussions with P&O about the situation, particularly of concern for their workers”.
Some of those who lost their jobs were informed of the decision on a video call.
Footage obtained by BBC South East showed a man in a suit telling them: “The company has made the decision that its vessels going forward will be primarily crewed by a third-party crew provider.
“Therefore, I am sorry to inform you that this means your employment is terminated with immediate effect on the grounds of redundancy.”
P&O Ferries said in a statement: “We have made a £100 million loss year-on-year, which has been covered by our parent, DP World. This is not sustainable.
“Our survival is dependent on making swift and significant changes now. Without these changes there is no future for P&O Ferries.”
Sailings were halted on Thursday morning and would remain suspended “for the next few days”, P&O Ferries told passengers.
P&O Ferries, which transports passengers and freight, operates four routes: Dover to Calais; Hull to Rotterdam; Liverpool to Dublin; and Cairnryan, Scotland, to Larne, Northern Ireland.
It has 2,200 employees remaining in the UK.
DP World was criticised for paying a £270 million dividend to shareholders at the end of April 2020 while P&O Ferries cut around 1,100 jobs as demand for travel collapsed due to the coronavirus pandemic.
P&O began operating ferries in the 1960s.
Cruise line P&O Cruises is unaffected by the developments as it is a separate business owned by Carnival UK.
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