The boss of P&O Ferries has admitted that most seafarers replacing the 800 workers the company sacked are being paid below the UK's national minimum wage.
A joint session of the Commons' transport and business select committees was told by chief executive Peter Hebblethwaite, whose basic annual salary is £325,000, said the average hourly pay of the new crew is just £5.50 per hour.
The minimum wage in the UK for people aged 23 and above is £8.91 per hour.
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The sacked crew earned an average of £36,000 per year.
Mr Hebblethwaite told MPs: "On the routes that are international routes, that are governed by ITF (International Transport Workers' Federation) standards, we are paying above ITF minimum wages."
Business committee member Andy McDonald said: "That's below the national minimum wage of this country. How do you reconcile that?"
Mr Hebblethwaite replied: "Where we are governed by national minimum wage, we will absolutely pay national minimum wage.
"This is an international seafaring model that is consistent with models throughout the globe and our competitors."
The ferry company boss offered no answer when Mr McDonald asked "could you sustain your lifestyle?" if he was paid the same as the new workers.
The Labour MP added: "How do you expect them to be able to feed their families and pay their bills?"
Mr Hebblethwaite said a consultation on the new crewing model for P&O Ferries would have been "a sham" as "no union could accept it" because of the "fundamental nature of change".
He went on: "We didn't want to put anybody through that.
"We are compensating people in full and up-front for that decision."
Questioned on whether he is concerned he had breached his legal obligations as a company director, Mr Hebblethwaite said: "I completely throw our hands up, my hands up, that we did choose not to consult.
"We did not believe there was any other way to do this."
Asked if he would make the same decision again with the benefit of hindsight, Mr Hebblethwaite replied: "We weren't viable before, and I know that if we hadn't made radical changes the business would have closed."
Mr Hebblethwaite also told MPs that Transport Secretary Grant Shapps was informed by P&O Ferries' owner DP World that the company would be changing its business model on November 22 last year.
The PA news agency understands the Department for Transport disputes that claim.
Mick Lynch, general secretary of the Rail, Maritime and Transport union (RMT), told MPs that P&O Ferries "made flagrant breaches of the law".
He said: "They've done it deliberately and they've factored in what they're going to have to pay for it."
He said the company is "threatening and blackmailing" its former employees, telling them they must sign a document or "you'll potentially get no award whatsoever, and you have to give up all of your legal rights".
He added: "This is absolutely outrageous."
Mr Lynch described UK employment law as "a shambles".
Andrew Burns QC, barrister at Devereaux Chambers, told MPs "all employers with ships must give a notice to the appropriate authority 45 days before dismissal".
He continued: "My understanding from what I've been told this morning is that the notice was given to the appropriate authorities in the countries where the ships are flagged only on the day of the dismissals and not in advance."
That "appears to be a breach" of employment law, and "it may be that (P&O Ferries) are liable to a prosecution", he said.
