- A Dubai court reversed its previous stance and confirmed the payment of wages in cryptocurrency.
- The employee’s contract in this case includes fiat currency and EcoWatt tokens as payment.
- The ruling sets a precedent for the adoption of digital currencies in financial transactions in the UAE.
In a landmark ruling, the Dubai Court of First Instance confirmed the validity of salary payments in cryptocurrency in employment contracts.
The ruling marks a significant shift from the court’s previous stance and highlights the growing acceptance of digital currencies in the UAE’s legal and economic framework.
Employees seek payment in EcoWatt tokens
The case, No. 1739 of 2024, involves an employee filing a lawsuit alleging that his employer failed to pay him regular wages and fringe benefits, including cryptocurrency.
The employment contract at issue provided for a monthly salary in legal tender and 5,250 EcoWatt tokens. The controversy arose due to the inability of employers to pay the cryptocurrency portion of wages for six months.
In 2023, the court initially acknowledged the inclusion of EcoWatt tokens in the contract, but did not mandate payment in cryptocurrency due to the lack of a clear method of valuing the tokens in fiat currency. The decision reflects a more traditional view, emphasizing the need for concrete evidence when dealing with non-conventional forms of payment.
Today’s ruling, however, represents a gradual shift. The court has now ordered that wages be paid in EcoWatt tokens under employment contracts without conversion to fiat currency.
Irina Heaver, a partner at Emirati law firm NeosLegal, hailed the decision as a step towards bringing digital currencies into the legal framework. Heaver noted that the court cited the UAE Civil Transactions Law and Federal Decree No. 33 of 2021 in both judgments, indicating a consistent application of legal principles in wage determination.
Heaver emphasized that the ruling sets a positive precedent for the adoption of digital currencies in financial transactions. She said: “This judgment reflects the wider acceptance of cryptocurrencies in employment contracts and highlights the court’s recognition of the changing nature of financial transactions in the Web3 economy.”
This court ruling not only upholds employees’ rights to receive agreed wages, but also marks a major step towards the UAE becoming a leader in the digital economy.
Dubai Court Validates Cryptocurrency Salary Payments
In a significant legal development, the Dubai Court of First Instance has confirmed the acceptance of cryptocurrency as a legitimate method of salary payment in employment agreements. This ruling signals a departure from the court’s previous position and underscores the increasing integration of digital currencies within the UAE’s legal and financial systems.
Employee Lawsuit and Crypto Payment Dispute
Case No. 1739 of 2024 involved a worker who sued his employer for non-payment of wages, including cryptocurrency, stipulated in their contract. The employment terms specified a monthly salary in fiat currency and EcoWatt tokens. The legal controversy arose when the employer failed to fulfill the cryptocurrency payment portion for six months.
In an initial 2023 decision, the court recognized the inclusion of EcoWatt tokens in the contract but refrained from mandating cryptocurrency payment due to valuation challenges. The judgment highlighted the requirement for evidential clarity when dealing with unconventional payment forms.
Legal Implications and Future Outlook
However, the recent ruling marks a shift in the court’s stance, directing the payment of wages in EcoWatt tokens without conversion to fiat currency. This decision, praised by legal experts like Irina Heaver, reflects a broader acceptance of digital currencies in contractual agreements and acknowledges the evolving financial landscape of the Web3 economy.
The verdict not only safeguards employees’ entitlement to agreed-upon wages but also positions the UAE as a frontrunner in embracing digital financial practices. By citing pertinent laws and decrees, the court’s decision sets a positive precedent for the widespread adoption of cryptocurrencies in financial transactions and solidifies the region’s foothold in the digital economy.
