Dubai Court Validates Crypto as a Legal Form of Salary Payment

Irina Heaver, a partner at UAE law firm NeosLegal, stated that this ruling in case number 1739 of 2024 marks a significant departure from the court’s stance in 2023. At that time, a similar claim was rejected because the cryptocurrency involved lacked a precise valuation method.

Heaver views this as a “progressive step” towards incorporating digital currencies into the UAE’s legal and economic frameworks.

The case involved an employee who sued their employer for unpaid wages, wrongful termination compensation, and other benefits. The employment contract in question stipulated a monthly salary in fiat currency and an additional 5,250 EcoWatt tokens. The dispute arose when the employer failed to pay the token portion of the salary for six months.

In 2023, the court acknowledged the inclusion of EcoWatt tokens in the contract but did not enforce the payment in cryptocurrency, as the employee did not provide a clear method for converting the tokens into fiat terms.

Heaver commented, "This decision represented a traditional perspective, highlighting the necessity for concrete evidence when addressing unconventional payment methods."

However, in 2024, the court “took a step forward,” ruling in favor of the employee and ordering the payment of the cryptocurrency salary as stipulated in the employment contract, without requiring conversion into fiat currency. Heaver noted:

“This decision demonstrates a wider acceptance of cryptocurrency in employment contracts and underscores the court’s acknowledgment of the evolving landscape of financial transactions in the Web3 economy.”

Heaver added that the court’s dependence on the UAE Civil Transactions Law and Federal Decree-Law No.

According to Heaver, this ruling also sets a positive precedent, encouraging further integration of digital currencies into everyday financial transactions. The lawyer believes it fosters a more inclusive and innovative business environment. Heaver remarked:

“This ruling affirms that when an employment contract includes such terms, both the company and the employee are obligated to honor them. It is reassuring to see the court acknowledge that wages, whether paid in fiat or cryptocurrency, are the rightful entitlement of the employee for their agreed-upon work.”

Heaver concluded that this decision is a win for employees and a significant step forward in the UAE’s journey toward becoming a leader in the digital economy.