Dubai’s Court of First Instance confirmed the legality of crypto payments for salaries under employment contracts in a landmark ruling on August 15.
The ruling, issued in case number 1739 of 2024 (Labour), marks a significant shift in the UAE’s legal approach to digital currencies, reflecting the growing adoption of crypto in the region.
Crypto Salary Dispute
The case involved a dispute in which the plaintiff, an employee, was claiming unpaid wages, wrongful dismissal and other employment-related benefits.
The plaintiff’s contract specified a monthly salary in fiat currency, in addition to 5,250 EcoWatt tokens, a form of crypto. The court ruled in favor of the plaintiff and ordered the employer to pay the salary due in EcoWatt tokens, citing the employer’s failure to provide proof of payment.
In response, the employer argued that the claimant had been dismissed for valid reasons and that the salary payments in EcoWatt tokens were not legally enforceable. However, the court ruled that the employment contract clearly stipulated payment in both fiat currency and crypto, and that the employer had not provided sufficient evidence to prove that the EcoWatt tokens had been paid.
The ruling highlights the importance of clear contractual agreements and the UAE’s willingness 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.
Undo previous statement
The decision is in stark contrast to a similar case from 2023, in which the same court rejected a claim regarding EcoWatt tokens. In that case, the employee’s inability to provide a clear valuation of the crypto led to the court’s refusal to enforce payment.
The 2024 ruling highlights the court’s changing attitude toward digital currencies. By recognizing crypto as a valid form of reward, the court set a precedent that could promote broader adoption of digital currencies across various sectors, including employment.
The decision was based on Article 912 of the UAE Civil Transactions Law and Federal Law Decree No. (33) of 2021, which regulates the determination and payment of wages.
As the country continues to position itself as a global hub for innovation, this decision could pave the way for further integration of digital currencies into the region’s legal and economic frameworks.