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Powered by article titled “Appeal court rejects challenge in Poundland case” was written by Patrick Butler Social policy editor, for on Friday 29th April 2016 11.44 UTC

The government has lost the latest round of its legal battle to stop thousands of jobseekers clawing back £130m in benefits that were stopped after they refused work placements under a “flawed” employment scheme.

Three court of appeal judges in London dismissed the challenge against an earlier high court ruling, which found that emergency laws pushed through by the government in 2013 were incompatible with human rights law.

The ruling was the latest in a series of judgments dating back to February 2013 in what has become known as the Poundland case.

The saga began after Cait Reilly, a geology graduate, won her claim that it was unlawful to force her to work for free at the discount chain Poundland as a condition of her claiming jobseeker’s allowance.

The coalition government subsequently brought in emergency retrospective legislation to “protect the public purse”. It argued that the sanctions had been justified and the claimants were seeking “undeserved windfall payments”.

That law was successfully challenged by campaigners on the basis that it retrospectively made lawful what senior judges had declared unlawful in order to avoid the consequences of its actions.

Appeal judges upheld that ruling on Friday. They said that when parliament enacted the 2013 act in order to retrospectively “validate those sanctions”, it was “successful in doing so as a matter of English law”.

But Lord Justice Underhill, announcing the ruling of the court, said: “We have also held – upholding the decision of the high court – that in the cases of those claimants who had already appealed against their sanctions, the act was incompatible with their rights under the European convention on human rights.”

He added: “Under the Human Rights Act, that ‘declaration of incompatibility’ does not mean that the 2013 act ceases to be effective as regards those claimants; it is up to the government, subject to any further appeal, to decide what action to take in response.”

Padraig Hughes, of Public Interest Lawyers, said: “The court of appeal has now confirmed what the high court made clear in 2014 – that the government’s cynical attempt to introduce retrospective legislation, after it had lost its previous case in the court of appeal, is unlawful and a breach of the Human Rights Act.

“It is yet a further example of the reckless approach this government continues to take towards the constitution and the rule of law.”

A spokesman for the Department for Work and Pensions said: “It’s only right that jobseekers do all they can to find work while claiming benefits. We are considering the judgment.”

A spokesman for the campaign group Boycott Workfare said: “We’re glad the court of appeal, like the high court, recognises this for the appalling, grasping injustice it was and is, but we’re disappointed they haven’t gone further and told the government to repay all the money they owe to claimants.” © Guardian News & Media Limited 2010

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