Image source, BBC NewsThe way P&O Ferries sacked 800 workers will be reviewed.
Many staff were told by video message on Thursday that it would be their final day of work.
In a letter to the company, Transport Secretary Grant Shapps questioned whether the move was legal.
P&O said it was the last resort to save the business.
Since the announcement, services have been canceled. The ferry company said it was aiming to have the first ones running again in the next day or two.
A Department for Transport spokesman could not provide details on the current value of government contracts awarded to P&O Ferries, but a Labour Party analysis of the public sector contracts database found the company had received $38 million in taxpayer-funded contracts since December. The contract for freight between Tilbury and Zeebrugge was worth over 10 million dollars.
The company was urged by Mr Shapps to stop the redundancies and to make sure replacements were safe to go to sea.
The government can consider if further action is appropriate if the P&O followed correct and legal processes.
Protests have been staged in the UK against the P&O redundancies, while the vessels stay docked at ports and cause travel disruption.
Business Secretary Kwarteng wrote to the P&O Ferries chief executive demanding answers to his questions.
The company appears to have failed to follow the correct process for making large-scale redundancies, which would include consulting with unions and staff representatives and notifying him through the insolvency service, according to a letter written by Mr Kwarteng to his boss.
Failure to notify is a criminal offence and can lead to an unlimited fine, according to the letter.
P&O Ferries was asked for details on the exact number of layoffs and how many of them involved consultation, as well as the location of work for each staff member dismissed.
He wanted to know if staff made redundant were offered alternative roles through an agency or directly for P&O Ferries.
After hearing the news, workers felt abandoned by the company.
Andrew Smith had worked for the company for 22 years. It is how our families have grown up, knowing that this is what we do, and it has just been turned on its head within a matter of hours.
James, who has worked for P&O Ferries in Dover for about four years, said he received a three minute pre-recorded message saying they were out of a job. Nothing else.
It was a complete surprise. I would have understood if it was at the height of Covid, but now we are seeing the end of travel restrictions and the start of summer bookings. He said that this has come completely out of the blue.
The business secretary raised the previous application for government support when travel was disrupted.
He wrote that it was depressing that this should happen given the millions of pounds of British taxpayer support that P&O companies received.
P&O Ferries is owned by a company called DP World.
Last year, the company announced 8 billion in revenues. The company claimed more than 15 million dollars in grants during the Covid pandemic.
In a new statement on Friday, P&O Ferries said that they took this difficult decision as a last resort and only after full consideration of all other options.
The move was labelled one of the most shameful acts in the history of British industrial relations by the RMT union.
Its national secretary told a crowd of about 250 demonstrators that they would make sure their workers got back on their vessels.
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