Transport select committee chairman Huw Merriman has call for new laws to prevent a repeat of mass sackings carried out by P&O Ferries this year.
His call came as the Insolvency Service admitted the ferry company, owned by Dubai-based DP World, will not face criminal proceedings over its actions.
P&O Ferries triggered widespread anger by abruptly dismissed almost 800 workers without notice in March.
Merriman told the BBC Radio 4 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 Ferries] actions are a disgrace but the disgrace will be on Parliament if we don’t fix it and stop it from happening again.”
Business secretary Kwasi Kwarteng had asked the Insolvency Service to investigate whether any offences had been committed.
But the government agency admitted there was “no realistic prospect of a conviction”.
A spokesperson said on Friday: “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 by the Insolvency Service remains ongoing.
The decision came the day after DP World reported record profits for the first half of the year, including the period when the staff dismissals took place.
Ratings union the RMT criticised the decision not to prosecute P&O Ferries.
General secretary Mick Lynch said that the company had been “allowed to get off the hook legally despite claims by the government it would take action”.
Labour accused the government of breaking a pledge to hold P&O Ferries to account.
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