The ruling clarified that crypto can be used as a valid form of remuneration in an employment contract.
The Dubai Court of First Instance has set the pace for crypto salaries. The tribunal ruled in case number 1739 of 2024 that cryptocurrency can be used as a valid form of payment for employee salaries as agreed in the employment contract.
Crypto for Salary Payment
The case was about a plaintiff employee who sued the employer for unpaid wages and wrongful termination. The employment contract specified a monthly salary in fiat currency, along with 5,250 EcoWatt tokens. The defendant failed to pay the EcoWatt token portion of the salary for six consecutive months and terminated the contract.
Upon failure to provide evidence of payment by the defendant, the court ruled in favor of the employee, recognizing cryptocurrency as a valid form of remuneration. The court ordered that the claimant be paid in fiat and EcoWatt tokens as specified in the employment contract.
Notably, the court’s decision to enforce the payment in cryptocurrency marks a significant shift in the UAE’s approach to cryptocurrencies in employment contracts. The verdict is based on the principle that “wages are a right of the employee for the work agreed upon”. This further proves that digital assets are valid and should be enforced when stipulated.
A Parallel Case in 2023
A similar case numbered 6947 was addressed by the same court in 2023. Although the court acknowledged the tokens’ inclusion in the employment contract, it refused to award the amount in EcoWatt tokens due to the employee’s failure to provide a clear method for calculating the cryptocurrency’s value in fiat.
Analyzing the related cases, Mahmoud Abuwasel, the Managing Partner of Wasel & Wasel law firm, noted that the judgments highlight “the consistent application of legal principles regarding the determination and payment of wages. However, the interpretation of these provisions evolved between the two judgments, reflecting the broader acceptance and integration of digital currencies in the UAE’s legal and economic framework.”
The court’s decision to enforce cryptocurrency payments as specified in contracts is a favorable precedent. This paves the way for increased adoption of cryptocurrencies across different industries and countries.
