The Government has failed in its bid to overturn a previous court ruling over the legality of its 'back to work' schemes, reports the BBC.
The Supreme Court has ruled against the Government, striking another blow to its 'back to work' schemes by stating that although they did not amount to 'forced labour', the schemes were 'legally flawed'.
The case against the 'back to work' schemes was brought by graduate Cait Reilly, who claimed that the schemes, which required her to work without pay for retail outlet Poundland, amounted to forced labour and was a breach of her human rights.
The two schemes in question were the Government's sector-based work academy scheme and the community action programme.
Both 'back to work' schemes require job seekers to partake in unpaid work in order to improve their CVs. However, they threaten punishment with a cut in benefits if the job seeker refuses to participate.
Reilly, who wishes to work as a museum curator in future, believed that working for free in a retail outlet would not add anything to her CV, and would in fact reduce her chance of securing a job by denying her the opportunity to volunteer at her local museum.
The Government challenged a previous Court of Appeal ruling supporting Reilly's claims.
The Supreme Court supported the decision of the Court of Appeal, saying that the schemes were legally flawed because the Government did not require a sufficiently detailed description of the work to be given to job seekers.
However, they rejected the notion that the schemes amounted to slave labour, and said they came 'nowhere close' to being a breach of human rights.
Both sides are claiming victory after the decision.
"It must be time for the Government to rethink its strategy and actually do something constructive to help lift people out of unemployment and poverty," Ms Reilly told Sky News.
"We have always said that it was ridiculous to say that our schemes amounted to forced labour, and yet again we have won this argument," said Work and Pensions Secretary Iain Duncan Smith.