P&O Ferries sacked 800 staff without warning last week, and it was awful, Chancellor Rishi Sunak told the BBC.
The government is looking at the legality of the actions of the firm.
According to the Sunday Times, ministers knew of the plan to sack crew, but failed to challenge it.
Full details were not available at that time, according to the Department for Transport.
The Sunday Times said that a memo was sent to ministers by a senior official in the government.
According to the Sunday Times, the note said the sackings were designed to ensure P&O remained a key player in the UK market for years to come.
The memo states that P&O Ferries may try and re-employ many staff on new terms and conditions or use agency staff to restart routes, which may cause disruption to services for 10 days.
The 800 P&O staff were told that they were losing their jobs with immediate effect.
The news was met with outrage from trades unions representing crew and ministers announced they would review all government contracts with the firm.
Mr Sunak said that P&O's approach wasappalling in the way that they treated their workers.
The government doesn't seem to have raised concerns with P&O before the firings.
The DfT said it was standard practice for officials to outline what they had been told in an internal memo.
The DfT said that the ministers made clear their outrage at the way in which P&O staff had been dismissed.
The DfT said the memo made clear that the priority was to work with unions to ensure workers rights are protected.
The DfT said that the transport secretary had urged the company to reconsider. Grant Shapps said he was deeply concerned at the move.
Louise Haigh, Labour's shadow transport secretary, said: "This bombshell letter proves that the government was aware of P&O ferries scandalous action - but complicit in it."
They knew that P&O was attempting to use exploitative fire and rehire practices and that people's livelihoods were on the line. They sat back and did nothing.
In a statement, P&O Ferries said that they took this difficult decision only after full consideration of all other options and that they concluded that the business wouldn't survive without fundamentally changed crewing arrangements.
Some of the people who were sacked by P&O Ferries will be hired by the company, according to a director at one of the competitors.
We reduced the capacity of vessels because of social distance. He said that they were increasing that back up again and that they were looking for some staff to help with that.
The P&O Ferries is owned by a group of companies, including a group of companies controlled by a fund in the United Arab Emirates.
The global economy began to pick up after the coronaviruses, and as a result, the revenue of the company soared by more than a fifth. The company had to lay off 1,100 workers during the Pandemic.
P&O Ferries resumed service between Dublin andLiverpool late on Saturday night. The other services are still suspended.