In a landmark ruling on August 15, the Dubai Court of First Instance confirmed the lawfulness of paying salary in cryptocurrency under an employment contract.
The ruling, handed down in Case No. 1739/2024 (Labour), marks a major shift in the UAE’s judicial approach to digital currencies and reflects the growing acceptance of cryptocurrencies in the region.
Cryptocurrency Salary Dispute
The case concerned a dispute in which the plaintiff-employee claimed unpaid wages, wrongful dismissal and other employment-related benefits.
The plaintiff's contract specified a monthly salary in fiat currency and payment of 5,250 Ecowatt tokens, a type of cryptocurrency. The court ruled in favor of the plaintiff and ordered the unpaid salary to be paid in Ecowatt tokens, because the employer failed to provide evidence of payment.
In response, the employer argued that the plaintiff was terminated for good reason and that the salary paid in EcoWatt tokens was not legally enforceable. However, the court found that the employment contract expressly provided for payment in both fiat and cryptocurrencies, and that the employer had not presented sufficient evidence to prove that the payment was made in EcoWatt tokens.
The ruling highlights the importance of clear contractual agreements and the UAE's readiness to adapt to modern financial practices, and it also represents the latest step in the country's progressive approach to the adoption and regulation of the cryptocurrency industry.
Overturn the previous ruling
The ruling contrasts with a similar case from 2023, in which the same court dismissed claims regarding Ecowatt tokens. In that case, the court refused to enforce the payment because the employees failed to provide a clear valuation of the cryptocurrencies.
The 2024 ruling highlights the court's changing attitude towards digital currencies. By recognizing cryptocurrencies as a valid form of compensation, the court set a precedent that could encourage broader adoption of digital currencies in various sectors, including employment.
The decision is based on Article 912 of the UAE Civil Transaction Law and Federal Decree No. 33 of 2021, which governs the determination and payment of wages.
The decision could pave the way for further integration of digital currencies into the region's legal and economic frameworks as the country continues to establish itself as a global hub for innovation.
