The Court of First Instance in Dubai, UAE, issued a decision recognizing cryptocurrency as a valid medium for paying salaries under employment contracts, according to a report Tuesday from The Gulf Business.
The case involved an employee who filed suit against an employer claiming that it had failed to pay a portion of the employee’s salary, payable in EcoWatt tokens under the employment agreement.
The contract stipulated that the employee’s monthly salary would include both a sum in “fiat currency”—a type of currency that is not backed by precious metal—and an additional 5,250 EcoWatt tokens, a form of cryptocurrency.
In its ruling, the court ordered the employer to pay the employee the overdue EcoWatt tokens as well as the fiat currency specified in the contract.
The decision follows a similar case in 2023, where a claim involving cryptocurrency payments was initially denied due to a lack of precise valuation for the tokens in fiat terms. At that time, the court required tangible evidence of the digital currency’s value.
However, this 2024 ruling marks a turning point in the UAE’s jurisprudence. The court ruled that employers must pay wages on their due dates through the Wage Protection System (WPS) or other approved systems.
The burden of proof for payment lies with the employer, and in the absence of evidence showing payment of the EcoWatt tokens, the court ruled in favor of the employee.
Lawyers have welcomed the ruling, viewing it as a significant step forward in protecting workers’ rights. Mahmoud Abuwasel, Managing Partner at the law firm of Wasel & Wasel, said that the decision sets a precedent for future cases.
“The court is now accepting and enforcing cryptocurrency as part of wage payments, provided that the contract clearly defines these terms,” said Abuwasel. “This evolution in legal interpretation is a positive development for the integration of cryptocurrencies into business practices and underscores the UAE’s commitment to adapting to the changing financial landscape.”