Penal labour or penal servitude is a form of unfree labour. The term may refer to two different notions: labour as a form of punishment and labour as a form of occupation of convicts.

Punitive labour
Convict or prison labour (also called hard labour) is another classic form of unfree labour used in both past and present as an additional form of punishment beyond imprisonment alone.
Convicts subjected to forced labour have often been regarded with lack of sympathy, because of the social stigma attached to people regarded as "common criminals" and a general perception that it must be deserved through the severity of the crime. In some countries and historical periods, however, prison labour has been forced upon people who have been: victims of prejudice, convicted of political crimes, convicted of "victimless crimes", or people who committed theft or related offences because they lacked any other means of subsistence — categories of people for whom compassion is typically called for.
In the UK in the 19th century, for instance, hard labour became a standard feature of penal servitude as penal transportation was phased out. Although it was prescribed for severe crimes (e.g. rape, attempted murder, malicious wounding, per the 1861 Offences against the Persons Act) it was also widely applied in cases of minor crime such as petty theft and vagrancy, as well as victimless behaviour deemed harmful to the fabric of society. Notable recipients of forced labour under British law include Oscar Wilde (after his conviction for gross indecency) and John William Gott (a terminally ill trouser salesman convicted of blasphemy).
The British penal colonies in Australia between 1788 and 1868 are probably the best examples of convict labour, as described above: during that period, Australia received thousands of transported convict labourers, many of whom had received harsh sentences for minor misdemeanours in Britain or Ireland.
Sometimes authorities turn prison labour into an industry, as on a prison farm. In such cases, the pursuit of income from their productive labour may even overtake the preoccupation with punishment and/or reeducation as such of the prisoners, who are then at risk of being exploited as slave-like cheap labour (profit may be minor after expenses, e.g. on security).
The British Penal Servitude Act of 1853 substituted penal servitude for transportation. Sentences of penal servitude were served in convict prisons and were controlled by the Home Office and the Prison Commissioners. After sentencing, convicts would be classified according to the seriousness of the offence of which they were convicted and their criminal record. First time offenders would be classified in the Star class; persons not suitable for the Star class, but without serious convictions would be classified in the intermediate class; and habitual offenders would be classified in the Recidivist class. Care was taken to ensure that convicts in one class did not mix with convicts in another.

Non-punitive prison labour

Galley slave
Convict lease
Chain gang