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Spelling and grammatical errors could cost you millions

It pays to have perfect grammar in all your policies and contracts, because it can cost you if you don’t. This article is for those who love conjugation, proofreading, and Oxford commas.

The Oxford comma is the grammatical equivalent of pineapple on pizza. Some people are steadfast supporters and will never make a list (eat a pizza) without it, while others are rendered sick at the mere thought of deploying the (usually) unnecessary ingredient.

It’s an issue that divides grammar pedants across the globe, but if you think it doesn’t matter to your business’ overall success, you’d be very wrong. A misplaced comma, or similar grammatical decisions, can do more than just cause your grammar-obsessed coworker to recoil. It can also leave your whole organisation out of pocket.

What difference does a comma make?

Earlier this year, Oakhurst Dairy – a company based in Portland, Maine – had to pay $US 5 million to their drivers after the United States Court of Appeals for the First Circuit ruled that a missing comma in their pay policy caused enough confusion to reimburse drivers four years’ worth of overtime.

According to Maine law, relayed by the New York Times, employees are entitled to time-and-a-half each hour after working for 40 hours. The employees had worked an average of 12 hours of overtime per week and were bringing in salaries of $46,800-$52,000 per year.

There were exemptions to the overtime rule, but the confusion lay in the lack of an oxford comma in the following sentence, which outlines those exemptions:

The canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of:

(1) Agricultural produce;

(2) Meat and fish products; and

(3) Perishable foods.

The Oakhurst Dairy drivers are responsible for distributing perishable foods, but not for packing them. So it was somewhat of a grey area, as they were unsure whether or not the policy exempted the distribution of the three categories or the packing for the shipping or distribution of them.

An Oxford comma (also known as a “serial comma”) after the word “shipment” would have saved the business some serious cash. After the payout semicolons were used to clarify the grammatical mess, with the chapter on employment practices now reading as follows:

The canning; processing; preserving; freezing; drying; marketing; storing; packing for shipment; or distributing of:

(1) Agricultural produce;

(2) Meat and fish products; and

(3) Perishable foods.

A poor choice of words

For a local example of a grammatical scramble, we look to Hail Creek  – a Rio Tinto subsidiary – and the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU), who disagreed over the use of a single word in an enterprise agreement.

In 2015, 20 mine workers from Hail Creek lost between $4,200-$4,500 when the company shortened shift lengths by 30 minutes.

However, confusion arose over the use of the word “indicative” in the agreement, specifically in the phrase “indicative 45.75 hour week”. Hail Creek appealed the decision of a judge, who it felt misinterpreted the agreement. A full Federal Court majority rejected the appeal, citing “an ungrammatical reading”.

“Hail Creek contended that the primary judge incorrectly treated the word ‘indicative’ as though it meant that the hours stipulated in the roster description were approximate… that was said to be incorrect because the hours stipulated by a roster are fixed and exact,” said Justice Bromberg via Workplace Express (paywall).

Bromberg said that “construction involves taking what, on its face, appears to be a composite expression (‘indicative 45.75 hour week’) and breaking it up into two disjointed parts, on the basis that each part is directed at a different function.

“The construction calls for an ungrammatical reading of the text in which the word ‘indicative’ does not condition or qualify the words ‘45.75 hour week’.”

In what might be the first time a grammatical modifier cost an Australian company so much, the court upheld the decision that Hail Creek had underpaid workers around $200,000 since October 2015.

Who would have thought that arguments over the correct usage of a single word could result in two court cases.

Reputational loss

Sometimes, the most embarrassing editorial mistakes aren’t words that are incorrectly spelt but words that are accidentally misused. Writer Julia McCoy recalls one particularly cringeworthy error.

“I’ve watched a colleague write an entire report in which he misspelled “public” as “pubic” – as in ‘the department of pubic affairs,’” she says.

She also outlines some other organisations that have suffered massive financial consequences for seemingly small slip-ups.

A Japanese bank, Mizuho Securities, had planned to sell a single share for 610,000 yen, but the employee in charge of making it happen got their wires crossed, listing 610,000 shares at a generous one yen a pop.

“Within less than 24 hours, the company had haemorrhaged $340 million,” says McCoy.

It’s not always financial blows that are born from a grammatical blunder, reputations are at stake too. In 2012, Republican candidate Mitt Romney suffered a hit to his reputation with his mobile app reading “A better Amercia” instead of “America”, sending the internet into stitches and likely losing him some typo-allergic supporters.

Spelling mistakes and grammatical errors are part and parcel of being a human being. In fact, if you look hard enough, you just might find one in this article. The lesson to take from this is simple: when you’ve got millions of dollars on the line, have someone cast their eagle eye over your words before sending them out into the world. If you don’t, it could be seriously embarassingment for you.


Have a question about conditions of employment? Access online HR resource AHRI:ASSIST for guidelines, policies and templates on contracts and enterprise agreements. Exclusive to AHRI members.

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Paul Jones
Paul Jones

Fantastic story. Well researched, and well written (no typos to be seen!). I’ve spoken at several AHRI conferences, and have found the writing of HR people to be quite good in terms of spelling and grammar.

However, often they have an opportunity to get more impact with their ideas by making their writing easier to read. Often they’re overcomplicating their writing with long words and longer sentences, i.e. it has a high reading-grade level. Simpler is better. You can check your grade level by running it through our free browser-based tool, Credosity:

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