The Dubai Court of First Instance has recognized salary payments in crypto as valid under employment contracts, showing the growing acceptance of crypto in the United Arab Emirates.
Irina Heaver, a partner at the UAE law firm NeosLegal, clarified that the ruling in case number 1739 of 2024 represents a departure from the court’s previous posture in 2023, in which a comparable claim was rejected due to the cryptocurrency’s lack of precise valuation.
Heaver asserts that this demonstrates a “progressive approach” to integrating digital currencies into the nation’s legal and economic framework.
Dubai court acknowledges the incorporation of tokens in salaries
Heaver stated that the case involved an employee who filed a lawsuit alleging that the employer had failed to pay their wages, unlawful termination compensation, and other benefits.
The worker’s employment contract included a monthly compensation of 5,250 EcoWatt tokens and a monthly fiat salary. The dispute results from the employer’s inability to pay the tokens portion of the employee’s compensation within six months.
The court recognized the incorporation of the EcoWatts tokens in the contract in 2023. Nevertheless, the employee could not enforce the payment in crypto, as they could not provide a clear method for valuing the currency in fiat terminology.
“This decision highlighted the necessity of concrete evidence when addressing unconventional payment forms, reflecting a traditional perspective,” Heaver stated.
Nevertheless, the attorney stated that the court “made progress” in 2024 by ruling in favor of the employee and directing the payment of the crypto remuneration by the employment contract without converting it to fiat. Heaver stated:
“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.”
Heaver further stated that the court’s consistent application of legal principles in wage determination is evidenced by its reliance on the UAE Civil Transactions Law and Federal Decree-Law No. 33 of 2021 in both judgments.
Crypto Adoption in the UAE has far-reaching Implications
Heaver also contends that the decision establishes a favorable precedent that promotes the continued integration of digital currencies into commonplace financial transactions. The counsel thinks that this promotes a more innovative and inclusive business environment. Heaver stated:
“This ruling affirms that if an employment contract includes such terms, the company and the employee must honor them. It is reassuring to see the court recognize that wages, whether paid in fiat or cryptocurrency, are the rightful entitlement of the employee for their agreed-upon work.”
Heaver further stated that this is a significant advancement in the UAE’s pursuit of becoming a digital economy leader and a success for employees.
