This article re‐examines the ILO's normative outlook on prison labour, arguing that it is out of touch with the realities on the ground, where public/private hybrid forms of prison labour are proliferating. The authors bring to light the controversy surrounding the position taken by the ILO, as member States repeatedly demand that it relax, and increasingly defy, its dichotomous stance. They illustrate the heavy price to be paid if the ILO stays on its current course, but also if it adopts the position favoured by some of these member States. Instead, they point to two alternatives that go beyond these conflicting positions.