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.
Lord Justice Pill, Lady Justice Black and Sir Stanley Burnton made the ruling.
Reilly described her two weeks at Poundland as "a complete waste of time".
She said: "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 Government must now table new regulations in accordance with the court's ruling.
Keep up to date follow ray on Twitter@Raywoolford