Peter Hebblethwaite replaced the workers with cheaper staff to protect the company, he said.
However, Pat Rafferty, Scottish Trades Union Congress (STUC) president, said sacking the seafarers via Zoom last month was “gutter” and “inhumane”.
Speaking at the annual conference in Aberdeen, Mr Rafferty said the P&O Ferries chief executive should be put in jail to send a clear message to employers.
It came as with P&O planning to resume operating between Dover and Calais in coming days amid accusations that it attempted to further reduce the wages of its seafarers.
Mr Hebblethwaite rejected a request from transport secretary Grant Shapps to reverse the decision.
He also admitted his company broke the law by failing to consult unions about the redundancies.
It is understood the business needed to cut costs to avoid collapse as it was losing money at a rate of £100 million per year.
Mr Hebblethwaite said re-employing the sacked staff on their previous wages would “deliberately cause the company’s collapse, resulting in the irreversible loss of an additional 2,000 jobs”.
Mr Rafferty said: “There is something seriously wrong with our society when a company CEO like P&O can swan into a Westminster parliamentary committee and openly state that he broke the law – and worse still, he’d do it again.
“What that clearly demonstrates is how useless the law is. There is no deterrent to companies like P&O who are getting away with destroying people’s lives.
“The law needs to change. Peter Hebblethwaite should be struck off the directors register and put behind bars.
“That would send a clear message to employers, act irresponsibly towards workers and face the possibility that you will be jailed.”
Mr Hebblethwaite was also accused of “corporate terrorism” last month as he faced MSPs in Holyrood’s net zero, energy and transport committee.
Mr Rafferty, who is also Scottish Secretary of Unite the Union, urged trade union members to boycott P&O Ferries until the dispute had been resolved.
His plea came with P&O expected to restart sailings for freight customers by Wednesday, although it is not anticipated that tourists will be carried until early next week.
On Monday morning the firm’s website began selling passenger tickets for cross-Channel sailings on its ship Spirit Of Britain from Wednesday.
The website later said there were “no sailings available for your selected dates”.
P&O Ferries has not operated between Dover and Calais since March 17.
Spirit Of Britain was detained by the Maritime and Coastguard Agency (MCA) on April 12 after safety issues were found, but was cleared to sail on Friday.
Meanwhile, Rail, Maritime and Transport (RMT) union general secretary Mick Lynch claimed P&O Ferries has been “prevented from further cutting the pay of vulnerable agency crew” by “pressure from RMT seafarers”.
The firm, owned by Dubai-based logistics giant DP World, insisted no agency workers were asked to take a pay cut.
The RMT received reports of agency workers at Dover being asked to sign new contracts with reduced payments.
Mr Lynch said: “There are no depths to which P&O and their Dubai owners at DP World will not sink to extract the maximum profit from ferry crews operating our vital maritime supply chains.”