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The United Arab Emirates has its image as a crypto-favoring country, where it was among the first few nations to openly endorse and develop this industry. Moreover, Dubai, a city in UAE, is the hub for crypto enthusiasts. From launching its own DMCC Crypto facility to accepting cryptocurrency in payment, the City of Gold has presented a crypto-friendly environment for companies and investors. And now the Dubai court has acknowledged the usage of cryptocurrency for salaries.
Dubai Court Ruling Favoring Crypto For Salary
As per the Wasel & Wasel legal firm, Dubai Court has acknowledged the payment of salaries in the form of cryptocurrency for the first time in history. As per the order, the cryptocurrency payments that are stated in the employment contracts will be accepted legally.
This ruling comes after an ex-employee filed a legal complaint on the failure of the company to pay a portion of their salary, which was in cryptocurrency per their employment contract. The plaintiff has approached the court after facing unpaid wages, wrongful termination compensation, and missing employment benefits. With that, a legal complaint has been booked under case number 1739 of 2024 (Labour).
The issue gains more importance with the revelation of the ex-employee’s missing salary of 5,250 EcoWatt tokens (crypto tokens). The employer failed to pay six months of salary in the form of cryptocurrency before terminating the employment.
After analyzing the circumstances and presenting documents, the Dubai court ruled in favor of the plaintiff while recognizing cryptocurrency as a valid form of salary. The court has ordered to pay the unpaid wages in the EcoWatt tokens itself rather than fiat.
The employer must pay the wages to the workers on the due dates, either through the Wage Protection System (WPS) or any other approved systems, and it is the employer who is tasked with proving the payment of wages to the workers and providing evidence of that. As the respondent did not provide evidence of payment of the claimant’s salary for the claimed period, and since the documents were void of such evidence, the court ordered the respondent to pay the claimant [redacted] AED in addition to [redacted] EcoWatt tokens.
Positive Ruling Comes After Rejection In 2023
Back in 2023, the case (Judgment No. 6947 of 2023) came to an unsuitable conclusion as the plaintiff failed to provide the calculated value of the 5,250 EcoWatt tokens. As a result, the Dubai court has gone against the plaintiff and stated: –
It is evident to the court from the case documents and evidence that the employment relationship between the claimant and the respondent is governed by the fixed-term employment contract previously mentioned. Regarding the determination of the start date of the claimant’s employment and the monthly salary, the court relies on what the claimant stated, with the start date being [redacted], and the gross and basic salary being [redacted] AED, with the end of service date being [redacted] (according to the termination letter). As the claimant did not provide evidence of the value of the digital currency (EcoWatt tokens), the court disregards it, since the respondent did not provide opposing evidence or any defense, and therefore, the court concludes that the duration of the claimant’s service was [redacted] and that the gross and basic salary was [redacted] AED, and the court rules in the case accordingly.
However, this year, the the court ruled in favor of the plaintiff after recognizing crypto as a form of salary payment. It gets more interesting as cryptocurrency, especially Bitcoin Reserve is solution to the US National Debt. The US presidential candidate, Donald Trump, and Senator Cynthia Lummis have spoken of developing policies for strategic Bitcoin reserves, making crypto the most hyped asset among countries.
Final Thoughts
UAE has been progressing with its crypto-related regulations, where it has even hosted the biggest crypto events like Blockchain Life. With the current ruling accepting the salary in crypto shows the country’s growing favor towards this industry. From the ruling of 2023 to 2024, the approach towards handling crypto payments has changed significantly. Earlier, the Dubai court ruled against the plaintiff after an unclear determination on the value of the 5,250 EcoWatt tokens. However, this time, the court has ordered the employer to pay in cryptocurrency instead of fiat.
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