University graduate Cait Reilly has won her Court of Appeal claim that requiring her to work for free at a Poundland discount store was unlawful.
Three judges in London ruled that the regulations under which most of the Government's back-to-work schemes were created are unlawful and quashed them. The Department for Work and Pensions has not been given leave to appeal, but has said that, regardless, it will appeal to the Supreme Court.
Miss Reilly, 24, from Birmingham, and 40-year-old unemployed HGV driver Jamieson Wilson, from Nottingham, both succeeded in their claims that the unpaid schemes were legally flawed.