in force in Liverpool and South Wales, but no new arrangements were entered into during the year.

The following table shows the number of firms and the number of employed persons covered by the arrangements in December, 1927:

Exchange of Unemployment Books.

The annual exchange of books whose currency expired on 3rd July, 1927, proceeded on lines similar to those of the annual exchange in previous years. An inquiry into the reasons for the failure, in the cases where it occurred, to surrender expired books was undertaken during 1927 in the South Eastern, South Western, and North Western Divisions. As in the inquiry in the Midlands Division in 1926, the results obtained were valuable and a few cases of non-compliance of long standing were disclosed. Towards the end of the year arrangements were concluded for applying this procedure to the remaining Divisions, namely, North Eastern, Scotland, and Wales.

Enforcement of Payment of Contributions.

The arrangements between the Ministry of Labour and the Ministry of Health in England, the Scottish Board of Health and the Welsh Board of Health, under which the detailed survey of employers and the investigation of individual cases of non-compliance is made on behalf of the Ministry by inspectors on the staff of those authorities, continued satisfactorily during 1927. The following table gives the number of employers visited by inspectors, together with the number of employees concerned and the amount of arrears collected during 1927.

By comparison with the total income of the Unemployment Fund these figures are of quite small dimensions and it continues to be the case that compliance with the Acts on the part of employers is substantially complete. The reasons for such noncompliance as there is range from genuine ignorance, inadvertence, bankruptcy and the like to wilful and deliberate evasion.

During the year criminal proceedings were taken in a number of cases to enforce payment of arrears. The number of convictions recorded was 1,003. In seven cases only were the summonses dismissed or withdrawn. Of these, one was dismissed under the Probation of Offenders Act, and three others on payment of costs and full arrears.

The Unemployment Insurance Acts enable the Ministry to obtain by order of the criminal Court one year's arrears of contributions (extended to two years' arrears by the Unemployment Insurance Act, 1927), but the remaining arrears, if not voluntarily forthcoming, are recovered by civil proceedings.

Stamp Frauds.

In recent years fraudulent dealings in stamps and other similar irregularities have engaged the attention of the Ministry, and in conjunction with the Ministry of Health measures have been taken to check this illegal traffic. It was found that various measures had been adopted to obtain unlawful possession of stamps, including, among other things, burglaries both of Exchanges, of which two cases came to light in the year 1927 and six in 1926, and of employers' premises. The task of tracking down this traffic to its source is by no means easy. 243 suspected cases were examined during the year. In some of these cases the suspicion proved to be unfounded. In others the irregularities were not serious, but 47 cases were taken to the Magistrates, and in the result terms of imprisonment were imposed in three cases and fines in 40 cases. Four cases were dismissed; in one of these defendant was bound over, and in the others the stamps were disallowed. Further cases are pending, and it is desirable that it should be known that the Ministry will continue to pursue this form of crime with the utmost rigour. In all cases where it was proved that stamps had been improperly affixed, steps were taken to recover the cost of the contributions from the employer responsible for payment of the contributions. Return of Contributions paid under the erroneous belief that they were payable.

Contributions have been returned under Section 28 (1) (as amended) of the Unemployment Insurance Act, 1920, in respect of approximately 26,000 employees, and the amount paid to them and to their employers during 1927 was £143,458.

The amount paid is twice as large as that paid during the previous year. The increase is due mainly to the effects of a decision that before 4th January, 1926, scale payment subpostmasters were not insurable. About 3,930 claims in such cases were paid, involving an amount of approximately £46,750. The rest of the increase is perhaps mainly accounted for by the extension of the time limit within which applications for these refunds may be made under the Unemployment Insurance (Return of Contributions) Regulations, 1926, the full effect of which was felt during 1927.

Repayments at Age of 60, and Compensatory Payments under

Section 9 of the Unemployment Insurance (No. 2) Act, 1924. The following table shows the number of applications received, allowed, and disallowed up to 31st December, 1927, together with the aggregate amounts and the average amount paid on the allowed claims. The number of claims received showed a slight fall in the early part of the year, but has, since then, remained steady. The average number received during the year has been 462 per week.

* At the end of December, 1927, of the applications received, 820 and 482 in connection with Section 25 and Section 9 respectively were under consideration.

This figure includes 153,076 claims for a refund under Section 25 which upon examination were found to be claims proper to be considered under Section 9, and were dealt with accordingly.

The observations on pages 60 and 61 of the Report for the year 1925 regarding the grounds of disallowance apply to the claims made in 1927.

SCOPE OF UNEMPLOYMENT INSURANCE SCHEME.

Determination of Questions of Insurability.

The number of written inquiries received in the Department in regard to liability to insurance under the Acts was somewhat less than in 1926, and approximated more nearly to the number in 1924 and 1925.

1483

B 3

During the year the Minister gave formal decisions on questions of insurability under Section 10 of the Unemployment Insurance Act, 1920, in 32 cases. These decisions were mainly concerned, as in the previous year, with the demarcation of the exceptions relating to employment in agriculture and domestic service.

On 29th July, 1927, in cases referred by the Minister to the High Court, Mr. Justice Roche decided that one man and five women who were employed as packers, graders, &c., by nurserymen and growers of fruit, &c., were employed in horticulture.

In the course of his judgment the Judge laid down the undermentioned working rule for the guidance of the Ministry, subject to the reservation that he could only state a working rule such as he would adopt himself on his present information and such as he would regard as open to correction and modification if circumstances made it necessary or desirable. The rule reads: "Persons are employed in agriculture and horticulture when employed upon any operations done about the production, preparation, or transfer of the products of farm or garden or orchard in the best saleable condition to a first buyer or to a salesman or agent for sale if one be employed, or to a distinct business under one proprietorship, as in Daniels' case. But if the industrial status and occupations of the employed persons are such that though they are working about or in connection with a farm or garden or orchard, they may properly be said to be essentially pursuing their own special occupations, they are not employed in agriculture or horticulture within the meaning of this rule."

(In the Daniels' case, mentioned in the rule, the employers were nurserymen and seed growers, but also had a distinct business as seed merchants).

Arising out of the hearing of these cases some doubt was felt as to the position where a person was employed by the same employer in both insurable and non-insurable employment in varying proportions over various periods. Accordingly on 19th December, 1927, the Minister referred to the High Court eight typical cases of persons employed in such "mixed" employment. These cases included such employments as barmaid and domestic servant, shop assistant and domestic servant, chauffeur-gardener and domestic servant, milk roundsman and agricultural labourer.

The general effect of the Judge's decisions was to confirm the Department's practice of holding that a substantial amount of insurable work in any week involves the payment of a contribution in spite of the fact that non-insurable work may predominate in that week, and to confirm that a person who is normally employed in insurable employment may properly be regarded as non-insurable during any week or longer period when he is working for the same employer in excepted employment.

On the same day the Judge dismissed the appeal of the Birmingham Corporation against the Minister's decisions that a

part-time library attendant and a bath attendant were employed in domestic service.

Exemptions.

The number of persons exempt from Unemployment Insurance in Great Britain at 31st December, 1927, was 31,822. Of these, 17,061 were exempt from Unemployment Insurance only and 14,761 from both Health and Unemployment Insurance.

During 1927 it was decided that at the annual July exchange all exempt persons' unemployment books should be exchanged by the Department's Exemptions Branch and not, as hitherto, at Employment Exchanges. This centralisation revealed many cases where exempt persons had ceased to be employed and their exemption was cancelled accordingly. The fall in the total number of exempt persons is explained, in the main, by this

cause.

The number of exemption certificates granted during the year 1927 was 6,506, made up as follows:

The following table shows the number of Authorities, &c., which had certificates at 31st December, 1927, and the number of employees covered by certificates at 5th July, 1926:--Number of Certificates of Exception granted under Part II (d) (as amended) of the First Schedule to the Unemployment Insurance Act, 1920, at 31st December, 1927, and the number of Employees covered by Certificates at 5th July, 1926 :