I think the point Hour Builder is making is that the policy appears not be based on legality. It may be convenience for the airline to have all crew with UK/EU passports but he wants to know what would happen if it was challenged. This is a very good question. If other airlines such as Zoom, QF, NZ, BD and VS can have crew on various passports, why can't BA? In effect BA are turning away Aussies, Kiwis, Canadians and South Africans with UK heritage, all people who could really make a contribution to the crew culture.
I've got two Aussie mates, one with UK heritage, one with Greek heritage. The one with Greek hertigage - who has never set foot in Greece - has more rights in the UK than the other one and this includes the right to fly for BA.