The Dubai Court of First Instance has affirmed the legality of crypto payments for salaries under employment contracts in a landmark ruling on Aug. 15.
The ruling, issued in case number 1739 of 2024 (Labour), marks a significant shift in the UAE’s judicial approach to digital currencies, reflecting the growing acceptance of crypto in the region.
Crypto salary dispute
The case involved a dispute where the plaintiff, an employee, claimed unpaid wages, wrongful termination, and other employment-related benefits.
The plaintiff’s contract specified a monthly salary in fiat currency alongside 5,250 EcoWatt tokens, a form of crypto. The court ruled in favor of the plaintiff, ordering the employer to pay the owed salary in EcoWatt tokens, citing the employer’s failure to provide evidence of payment.
In response, the employer argued that the plaintiff had been terminated for valid reasons and that the salary payments in EcoWatt tokens were not legally enforceable. However, the court found that the employment contract clearly stipulated the payment in both fiat currency and crypto, and the employer had not provided sufficient evidence to prove that the EcoWatt tokens had been paid.
The ruling emphasizes the importance of clear contractual agreements and the UAE’s readiness to adapt to modern financial practices. It also marks the latest step in the country’s progressive approach to adopting and regulating the crypto industry.
Overturning previous ruling
The decision contrasts sharply with a similar case in 2023, in which the same court dismissed a claim involving EcoWatt tokens. In that instance, the employee’s inability to provide a clear valuation of the crypto led to the court’s refusal to enforce the payment.
The 2024 ruling highlights the court’s evolving stance on digital currencies. By recognizing crypto as a valid form of remuneration, the court has set a precedent that could encourage broader adoption of digital currencies in various sectors, including employment.
The decision was based on Article 912 of the UAE Civil Transactions Law and Federal Decree-Law No. (33) of 2021, which governs the determination and payment of wages.
As the country continues to position itself as a global hub for innovation, this decision may pave the way for further integration of digital currencies into the region’s legal and economic frameworks.
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