A judge has rejected jobless graduate Cait Reilly's claim that a scheme requiring her to work for free at a Poundland discount store breached human rights laws banning slavery.
Reilly criticised the Government back-to-work schemes, calling it "forced labour".
Mr Justice Foskett, sitting at the High Court in London, said that "characterising such a scheme as involving or being analogous to 'slavery' or 'forced labour' seems to me to be a long way from contemporary thinking".
Miss Reilly, 23, from Birmingham, and 40-year-old unemployed HGV driver Jamieson Wilson, from Nottingham, both claimed that the unpaid schemes they were on violated article four of the European Convention on Human Rights, which prohibits forced labour and slavery.
The judge said both Miss Reilly and Mr Wilson were each entitled to a declaration that there had been breaches of the 2011 jobseeker's allowance regulations in their cases.
Mistakes had been made in notifying Ms Reilly about the requirements of the Work Academy Scheme so that she did not appreciate the scheme was not mandatory. Mr Wilson had been given inadequate notice about the Community Action Programme (CAP).
But the judge ruled neither scheme was contrary to article four, and the errors made did not invalidate the 2011 jobseeker's allowance regulations.
A judge at London's High Court was told by Ms Reilly's QC that the geology graduate's stint at the Poundland near her home in Kings Heath, Birmingham, involved her carrying out "unpaid menial work".
This was made up of very basic tasks, like sweeping and shelf-stacking.
Cait had signed up to a Work Academy Scheme open day, but she was unaware that it would require her to work for free at Poundland last November.
Nathalie Lieven QC submitted to Mr Justice Foskett: "Such work did not contribute to (Ms Reilly's) search for work to any extent."
The ruling will come as a relief to the Government. Had it lost the legal challenge, it was likely that all back-to-work schemes would have been potentially invalid.