The government has canceled a contract with P&O Ferries after summarily laying off nearly 800 employees in March.
The Home Office said a P&O agreement with the UK Border Force would end “with immediate effect”.
Transport Secretary Grant Shapps said: “We are reforming the Law of the Sea to prevent companies from exploiting loopholes and to protect workers’ rights.”
P&O Ferries replaced its laid-off employees with foreign agency workers who paid less than minimum wage.
A Home Office spokesman said: “In response to P&O Ferries’ unacceptable conduct, Border Force has terminated its agreement with P&O to provide emergency travel services to adjacent ports, effective immediately.”
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The Department for Transport said it had completed a review of its links with P&O Ferries – which resulted in its only contract identified with the company being terminated.
The boss of P&O Ferries recently told the BBC he was “incredibly sorry” for the impact felt by hundreds of laid-off employees.
However, Peter Hebblethwaite insisted the decision was “the way we only thought possible”.
The firings in March sparked outrage and prompted calls for Mr Hebblethwaite to resign.
The insolvency administration has initiated criminal and civil investigations into the circumstances of the layoffs.
P&O Ferries services were suspended following the mass layoffs and several of the company’s ships failed safety inspections before being cleared to resume service.
The reduced ferry capacity contributed to the particularly long truck queues on the way to Dover before Easter.
Earlier this month, P&O Ferries announced it was resuming passenger crossings from Dover to Calais for the first time since the controversial redundancies.
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