The Insolvency Service has determined P&O Ferries will not face criminal proceedings over its actions in firing almost 800 workers earlier this year.
The company sparked public anger and was hauled in front of MPs to answer questions when it sacked hundreds of workers without notice in March.
Business Secretary Kwasi Kwarteng asked the Insolvency Service to investigate whether any offences had been committed.
In a statement, the Government agency said it had determined there was “no realistic prospect of a conviction”.
A spokesperson said: “After a full and robust criminal investigation into the circumstances surrounding the employees who were made redundant by P&O Ferries, we have concluded that we will not commence criminal proceedings.”
A civil investigation is ongoing.
Nautilus International, a union which represents maritime professionals, said the Insolvency Service’s decision will be a blow to the “discarded” workers.
General secretary Mark Dickinson said: “This is a deeply disappointing decision and will be met with frustration and anger by the 786 seafarers and their families who were so cruelly discarded by P&O Ferries.
“Only one day after P&O Ferries parent company announced record profits, making the company’s claims on operational sustainability questionable, we are further let down by a system that fails to punish apparent criminal corporatism.
“The message is clear, P&O Ferries must be held properly accountable for their disgraceful actions and we will continue the campaign to ensure that the CEO and his fellow Directors are held to account and to make certain this can never happen again.”
During the hearings in Parliament the business admitted that it had broken the law that would have forced them to give notice of the firings. This was because no unions would have accepted its new proposals, bosses said at the time.
Commons transport committee chairman Huw Merriman called on the Government to legislate to prevent a repeat of the scandal.
The Tory MP told BBC Radio 4’s Today programme: “The law isn’t strong enough and as MPs we need to legislate to make sure that it is.
“I still maintain their (P&O’s) actions are a disgrace but the disgrace will be on Parliament if we don’t fix it and stop it from happening again.”
Labour accused the Government of breaking its pledge to hold P&O to account and warned of a repeat of the mass firing.
Shadow employment rights minister Justin Madders said: “For all the handwringing of Tory ministers, they’ve broken the promises they made after P&O’s outrageous behaviour and instead changed the law to open the door for others to follow in their wake elsewhere.
“This outcome is a sign of a broken economy under the Tories and the fundamental weakness of employment protections under their Government.”
A Government spokesperson told the BBC: “In sacking 800 dedicated staff on the spot, P&O Ferries not only acted callously but failed to uphold the high standards we expect of British businesses.
“Given their appalling behaviour, it’s very disappointing that the company will not face criminal proceedings.”
