Dubai salary in crypto? Court orders company to pay employee's pay in dirhams, e-currency

In a landmark ruling, a Dubai court has ordered a company to pay an employee’s outstanding dues in UAE currency and cryptocurrency as agreed in the contract.

This came after the employee filed a case of arbitrary dismissal against the company.

The ruling by the Dubai Courts of First Instance was announced in case number 1739 of 2024, marking a significant shift and progressive approach as the financial transactions industry evolves constantly.

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The employee’s contract specified monthly salary to be paid in UAE dirhams and Ecowatt Tokens, which is a form of cryptocurrency. After the arbitrary dismissal case was ruled in favour of the employee, the court ordered the company to pay the employee her wage in Ecowatt Token as well.

Mahmoud Abuwasel, managing partner, Wasel and Wasel, said the dispute was centred around employers’ failure to pay the 5,250 EcoWatt token portion of the salary for six months and allegedly the wrongful termination of the employee.

“Dubai Courts have made a landmark ruling that salaries paid in cryptocurrency are legally valid as they show a significant change in the legal and economic landscape of the UAE. The 2024 decision underscores the principle that wages are a fundamental right of the employee, rooted in the agreed-upon work and enshrined in Article 912 of the Civil Transactions Law. This ruling builds upon the legal framework established by Federal Decree-Law No. (33) of 2021, which governs labour relations in the UAE, and highlights the flexibility in wage payment mechanisms, whether through the traditional Wage Protection System (WPS) or other approved systems,” said Navandeep Matta, senior associate, Kochhar & Co Inc. Legal Consultants (Dubai Branch).

By awarding some part of the complainant’s salary in EcoWatt tokens, Matta said, not only did it protect the worker’s right to his earnings but also maintained pace with technological advancement, thereby, highlighting that methods used to pay can be changed over time.

Irina Heaver, a partner at UAE law firm NeosLegal, clarified that under the ruling of the Dubai Court of First Instance, Project Tokens (which can also be called cryptos), which were part of the employment contract in addition to salary (in dirhams), were found to be a valid form of compensation and awarded to the employee.

“The court recognised project tokens as a legitimate part of an employee’s salary. With over 3,000 crypto companies employing tens of thousands across the UAE, this ruling is a win for employees’ rights. In the Web3 space, it’s common for projects to reward employees with tokens, aligning their interests with the project’s success. Why should venture capitalists have all the upside? Employees, who are the backbone of these innovations, deserve to share in that success,” she explained.

"This, however, does not in any way change or impact the fact that the AED dirham is the only legal tender in the UAE and that salary payments in the UAE need to be registered with the WPS system, which only operates with AED. This case concerns additional employee benefits that the employer may promise to the employees, such as flights home, bonuses, shares in the business. In this instance, it was the Project Tokens,” she said, adding that some media outlets and social media accounts misinterpreted this labour case ruling, creating misleading headlines that announced various legislative changes in the UAE, which is not the case.

Abuwasel added that as the company did not provide evidence of payment of the due amount to the claimant for the claimed months in EcoWatt tokens, the court ordered the firm to pay the claimant the value of her wages in EcoWatt tokens.

In 2023, under the judgement number 6,947, the court ruled in a dispute where part of the employee’s salary was to be paid in EcoWatt tokens. The court acknowledged the inclusion of token in the employment contract, but ultimately refused the award amount in EcoWatt token, he said.

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