In a landmark decision, the Dubai Court of First Instance has ruled that cryptocurrency can be legally recognized as a valid form of salary payment under employment contracts. This ruling marks a significant shift in the United Arab Emirates’ legal approach to digital currencies, particularly in the context of employment.
The case that led to this groundbreaking ruling, known as case number 1739 of 2024, involved an employment dispute. The plaintiff, an employee, claimed unpaid wages and wrongful termination compensation. The employment contract specified that the employee’s salary would be paid partly in fiat currency and partly in 5,250 EcoWatt tokens, a form of cryptocurrency. When the employer failed to pay the cryptocurrency portion of the salary over six months, the employee took legal action.
In its 2024 ruling, the Dubai Court of First Instance sided with the employee, recognizing the validity of the cryptocurrency payment as specified in the employment contract. The court ordered the employer to fulfill the contractual obligation by paying the salary in EcoWatt tokens without requiring conversion into fiat currency. This decision represents a significant departure from the court’s earlier stance in 2023, when a similar claim was denied due to the lack of a straightforward method for valuing the tokens.
Legal professionals have praised the ruling for its forward-thinking approach. Irina Heaver, a partner at UAE law firm NeosLegal, commented on the decision:
“This decision reflects a broader acceptance of cryptocurrency in employment contracts and highlights the court’s recognition of the evolving nature of financial transactions within the Web3 economy.”
This ruling is not just about one employee’s salary but represents a broader acknowledgment of how value is created and shared in the digital economy. The court’s decision was grounded in Article 912 of the UAE Civil Transactions Law, which emphasizes that wages are a worker’s right and must be paid on due dates.
The court stated:
“As the respondent did not provide evidence of payment in EcoWatt tokens, the court orders the respondent to pay the claimant the value of her wages in EcoWatt tokens.”
This decision is expected to pave the way for broader adoption of cryptocurrencies in the UAE, especially with over 3,000 cryptocurrency companies operating in the region. It provides a much-needed layer of protection for employees who may choose to receive part of their salaries in digital currencies.
As the UAE continues to embrace digital innovation, this ruling signals a new era for the integration of cryptocurrencies into everyday financial transactions.
This article includes information originally reported by cryptonews.com.
