In a landmark ruling on August 15, the Dubai Court docket of First Occasion confirmed the lawfulness of paying wage in cryptocurrency underneath an employment contract.

The ruling, handed down in Case No. 1739/2024 (Labour), marks a significant shift within the UAE’s judicial strategy to digital currencies and displays the rising acceptance of cryptocurrencies within the area.

Cryptocurrency Wage Dispute

The case involved a dispute during which the plaintiff-employee claimed unpaid wages, wrongful dismissal and different employment-related advantages.

The plaintiff's contract specified a month-to-month wage in fiat forex and cost of 5,250 Ecowatt tokens, a sort of cryptocurrency. The court docket dominated in favor of the plaintiff and ordered the unpaid wage to be paid in Ecowatt tokens, as a result of the employer failed to supply proof of cost.

In response, the employer argued that the plaintiff was terminated for good trigger and that the wage paid in EcoWatt tokens was not legally enforceable. Nonetheless, the court docket discovered that the employment contract expressly supplied for cost in each fiat and cryptocurrencies, and that the employer had not introduced adequate proof to show that the cost was made in EcoWatt tokens.

The ruling highlights the significance of clear contractual agreements and the UAE's readiness to adapt to trendy monetary practices, and it additionally represents the newest step within the nation's progressive strategy to the adoption and regulation of the cryptocurrency trade.

Overturn the earlier ruling

The ruling contrasts with the same case from 2023, during which the identical court docket dismissed claims relating to Ecowatt tokens. In that case, the court docket refused to implement the cost as a result of the staff failed to supply a transparent valuation of the cryptocurrencies.

The 2024 ruling highlights the court docket's altering perspective in the direction of digital currencies. By recognizing cryptocurrencies as a sound type of compensation, the court docket set a precedent that might encourage broader adoption of digital currencies in numerous sectors, together with employment.

The choice is predicated on Article 912 of the UAE Civil Transaction Legislation and Federal Decree No. 33 of 2021, which governs the dedication and cost of wages.

The choice may pave the best way for additional integration of digital currencies into the area's authorized and financial frameworks because the nation continues to determine itself as a world hub for innovation.