Back-to-work scheme regulations unlawful, not schemes themselves, says expert

However employment law expert Maria Passemard of Pinsent Masons, the law firm behind Out-Law.com, said that contrary to press reports the court did not rule that the schemes themselves amounted to unpaid "forced labour".

In its judgment, the Court of Appeal considered the legality of two of the back-to-work schemes established in 2011 under the ambit of the Jobseeker's Allowance (Employment, Enterprise and Skills) (ESE) Regulations. These were the Community Action Programme (CAP), designed to target the very long-term unemployed, and the sector-based work academy (SBWA) work experience and training scheme.

"The Court of Appeal did not find that the schemes amounted to 'forced labour', as has been claimed by a number of commentators, but rather that the ESE Regulations behind the schemes did not comply with the Act of Parliament that gave the Department for Work and Pensions (DWP) the power to introduce the programme," Passemard said.

"The Court ruled that the Work and Pensions Secretary had acted unlawfully by not giving the unemployed enough information about the penalties they faced and their rights to appeal against being made to work on an unpaid basis. However, the Appeal Court judges backed the High Court's earlier view that requiring jobseekers to participate in the scheme did not breach their human rights," she said.

"If you do engage workers on these schemes then you can continue to do so as the claims are against the Government rather than the individual companies which have participated in these schemes. When these cases first hit the headlines last year a number of companies refused to continue to offer work experience via these schemes due to the negative press attention and public pressure applied at the time," she said.

The DWP said that it was "tabling new regulations to ensure that we can continue requiring people to take part in ... schemes which give them the skills and experience they need to find work". It would also challenge the Court of Appeal's findings in the Supreme Court, it said.

In August last year, the High Court originally ruled that the schemes were legal but that the information provided to participants by the Government was insufficient. The DWP had failed to provide Jamieson Wilson with sufficient information about the consequences of not participating in the CAP scheme. A second claimant, Caitlin Reilly, had not been informed in writing that her attendance at an 'open day' under the SBWA was voluntary, it ruled.

Wilson had refused to participate in the CAP scheme when he was told that he had to work for six months unpaid for up to 30 hours per week while Reilly ultimately participated in the SBWA against her wishes. Both had been informed that they risked losing unemployment benefits, paid under the Jobseekers' Allowance (JSA) scheme, if they did not participate in the work programmes.

JSA is a benefit payable to individuals not in employment providing that certain conditions are met. These include that the individual must be available for employment, has entered into a jobseeker's agreement which remains in force and is actively seeking employment. Since 2009, the Government has also had the power to create schemes which "require participants to undertake work, or work-related activity ... with a view to improving their prospects of obtaining employment" in exchange for the provision of benefits.

ILord Justice Pill said in the ruling that it was "readily understandable" that the Government required people in receipt of benefits to "participate in arrangements which may improve their prospects of obtaining remunerative employment". He also agreed that these schemes needed to be flexible, in order to reflect the "infinite" variety of jobseekers' needs. However, the question of whether the overarching ESE Regulations were a valid way of giving legal effect to the schemes was one of "statutory construction", he said.

"I am unable to conclude that the statutory requirement for the Regulations to make provision for schemes of a prescribed description is met," he said. "Simply to give a scheme a name cannot, in context, be treated as a prescribed description of a scheme in which claimants may be required to participate."

"Arrangements are not made by the Secretary of State in accordance with regulations unless the statutory requirement for schemes of a prescribed description is met in the regulation itself. The statutory requirement is that the prescribed description is in the regulation ... Even if the arrangements are in accordance with the regulations, that does not establish that the regulations are in accordance with the statute and that is the point at issue," he said.

Tessa Gregory of Public Interest Lawyers, who represented Reilly and Wilson, said that the judgment would allow "all of those who have been stripped of their benefits" to "claim the money back that has been unlawfully taken away from them". However, the Government has said it does not plan to backdate any benefits, employment law expert Maria Passemard said.

In a statement on its website Poundland, where Reilly was placed as part of the SBWA, said that it had now withdrawn from the scheme. It is now in the process of opening its own "completely voluntary" work experience programme, where "no one has their benefits taken away from them at any point during the process", it said.