In major crypto news today, Dubai is rewriting the rules on salary day.
In a landmark move, the Dubai Court of First Instance has significantly departed from its previous position on cryptocurrency. According to Irina Heaver of NeosLegal, a recent Dubai court ruled that salary payments in digital assets are legally valid under employment contracts in the UAE.
This decision marks a significant departure from the court’s previous position in 2023, where a similar claim was dismissed due to the lack of precise valuation for the cryptocurrency involved.
Heaver, a partner at UAE firm NeosLegal, highlighted the “progressive” approach in case 1739 of 2024, which paves the way for integrating digital currencies into the UAE’s legal and economic landscape.
Here’s what the latest crypto news reveals: The case in question involved an employee who filed a lawsuit against their employer, alleging non-payment of wages, wrongful termination, and other owed benefits. The employment contract specified a monthly salary in fiat currency along with 5,250 EcoWatt tokens. The dispute arose when the employer failed to pay the crypto portion of the salary for six consecutive months.
A 2023 court decision acknowledged EcoWatt tokens in an employment contract but declined to enforce crypto payment due to the employee’s inability to accurately value the tokens. Heaver noted this reflected a traditional legal approach requiring concrete evidence for unconventional payments.
However, a groundbreaking 2024 ruling upheld the contract, mandating crypto payment without fiat conversion, signaling a progressive shift in the UAE’s legal landscape.
Moreover, Heaver highlighted that this decision underscores the court’s growing acceptance of cryptocurrency in employment contracts and its recognition of the evolving nature of financial transactions within the Web3 economy.
The court’s reliance on the UAE Civil Transactions Law and Federal Decree-Law No. 33 of 2021 in both the 2023 and 2024 judgments illustrates the consistent application of legal principles in determining wages. According to Heaver, this ruling sets a positive precedent, encouraging the further integration of digital currencies into everyday financial transactions and fostering a more inclusive and innovative business environment.
Heaver concluded by saying:
This ruling affirms that if an employment contract includes such terms, both 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.”
She also added that this is a win for employees and a significant stride in the UAE’s journey towards becoming a leader in the digital economy.
