Employment minister Mark Hoban has said the Government "will take action" to correct work scheme regulation after the Court of Appeal's ruling that making University graduate Cait Reilly work for free at a Poundland discount store was unlawful.
Today's Court of Appeal ruling that it is unlawful to be made to work for free demonstrates there is a "big hole" in the Government's work scheme programmes, according to the Trade Union Congress (TUC).
TUC General Secretary Frances O’Grady said: “This blows a big hole through the Government's workfare policies. Of course voluntary work experience can help the jobless, and it is right to expect the unemployed to seek work.
“But it is pointless to force people to work for no pay in jobs that do nothing to help them while putting others at risk of unemployment.
"This policy is about blaming the jobless, not helping them. Ministers should now abandon this misguided approach, and instead guarantee real jobs for the long-term unemployed, especially the young.”
Solicitor Tessa Gregory, who represented Cait Reilly and 40-year-old unemployed HGV driver Jamieson Wilson, said today's ruling reveals "a lack of transparency" by the Department for Work and Pensions in implementing mandatory work schemes.
The case has revealed that the Department for Work and Pensions was going behind Parliament's back and failing to obtain Parliamentary approval for the various mandatory work schemes that it was introducing.
It also reveals a lack of transparency and fairness in the implementation of these schemes.
The claimants had no information about what could be required of them under the back-to-work schemes.
The Court of Appeal has affirmed the basic constitutional principle that everyone has a right to know and understand why sanctions are being threatened and imposed against them.
University graduate Cait Reilly, who won her Court of Appeal claim today that requiring her to work for free at a Poundland discount store was unlawful, said she was "delighted" with the judgement.
I brought this case because I knew it was wrong when I was prevented from doing my voluntary work in a museum and forced to work in Poundland for free for two weeks as part of a scheme known as the sector based work academy.
Those two weeks were a complete waste of my time as the experience did not help me get a job.
I wasn't given any training and I was left with no time to do my voluntary work or search for other jobs.
The only beneficiary was Poundland, a multimillion-pound company. Later I found out that I should never have been told the placement was compulsory.
I don't think I am above working in shops like Poundland. I now work part time in a supermarket. It is just that I expect to get paid for working.
I hope the Government will now take this opportunity to rethink its strategy and do something which actually builds on young unemployed people's skills and tackles the causes of long-term unemployment.
I agree we need to get people back to work but the best way of doing that is by helping them, not punishing them.
The Government ought to understand that if they created schemes which actually helped people get back into work then they wouldn't need to force people to attend.
The Court of Appeal's unanimous decision against discount store Poundland is a "huge setback for the Department for Work and Pensions (DWP), whose flagship reforms have been beset with problems since their inception", according to Public Interest Lawyers.
The lawyers, who represented Cait Reilly and 40-year-old unemployed HGV driver Jamieson Wilson, said that "until new regulations are enacted with proper parliamentary approval, nobody can be compelled to participate on the schemes".
Today's judgment sends Iain Duncan Smith back to the drawing board to make fresh regulations which are fair and comply with the court's ruling.
Until that time nobody can be lawfully forced to participate in schemes affected such as the Work Programme and the Community Action Programme.
All of those who have been stripped of their benefits have a right to claim the money back that has been unlawfully taken away from them.
University graduate Cait Reilly's successful appeal was made by Lord Justice Pill, Lady Justice Black and Sir Stanley Burnton.
In November 2011, Miss Reilly had to leave her voluntary work at a local museum and work unpaid at the Poundland store in Kings Heath, Birmingham, under a scheme known as the "sector-based work academy".
She was told that if she did not carry out the work placement she would lose her jobseeker's allowance.
For two weeks she stacked shelves and cleaned floors.