Court orders company to pay employee wages in electronic currency, dirhams. A landmark Dubai court has ordered a company to pay an employee’s unpaid wages in cryptocurrency and UAE currency, in accordance with the terms of the contract. This happened after the employee filed a case against the company for arbitrary dismissal.
The Dubai Courts of First Instance made their decision in case number 1739 of 2024, which represents a significant shift and a forward-thinking approach in the constantly changing financial transactions industry.
The employee’s contract stipulated that the monthly salary would be paid in Ecowatt Tokens, a cryptocurrency. The court ordered the company to pay the employee her wage in Ecowatt Token after the arbitrary dismissal case was decided in her favor.
According to Mahmoud Abuwasel, managing partner of Wasel and Wasel, the dispute stemmed from the alleged wrongful termination of the employee and employers’ failure to pay the 5,250 EcoWatt token portion of the salary for six months.
“The landmark decision that salaries paid in cryptocurrency are legally valid was made by the Dubai Courts because it demonstrates a significant change in the UAE’s legal and economic landscape.
The principle that wages are an employee’s fundamental right, rooted in the agreed-upon work and enshrined in Article 912 of the Civil Transactions Law, is emphasized by the 2024 decision. According to Navandeep Matta, senior associate at Kochhar & Co. Inc., “This ruling builds on the legal framework established by Federal Decree-Law No. (33) of 2021, which governs labor relations in the UAE, and highlights the flexibility of wage payment mechanisms, whether through the traditional Wage Protection System (WPS) or other approved systems.”
Consultants in law (Dubai Branch) Matta asserted that not only did it safeguard the worker’s right to his earnings by awarding a portion of the complainant’s salary in EcoWatt tokens, but it also kept up with technological advancement, demonstrating that payment methods can change over time.
Irina Heaver, a partner at NeosLegal in the United Arab Emirates, clarified that the Dubai Court of First Instance ruled that Project Tokens—also known as cryptos—in addition to the employee’s salary (in dirhams) were a valid form of compensation and were given to the employee. Project tokens were recognized by the court as a valid component of an employee’s salary.
This ruling is a victory for the rights of employees, as there are over 3,000 crypto companies in the UAE that employ tens of thousands of people. To align employees’ interests with the project’s success, projects frequently use tokens to reward workers in the Web3 space.
Why should venture capitalists enjoy every benefit? She explained, “Employees, who are the foundation of these innovations, deserve to share in that success.” “However, this does not change or affect the fact that the AED dirham is the only currency that is legal tender in the UAE, nor does it change the requirement that salary payments in the UAE be registered with the WPS system, which only accepts AED.
This case involves additional employee benefits, such as shares in the company, bonuses, and flights home, that the employer may promise to the employees. She continued, “In this instance, it was the Project Tokens.” She added that some media outlets and social media accounts had erroneously interpreted the ruling in the labor case, resulting in headlines that falsely proclaimed a number of legislative changes in the UAE.
Abuwasel added that the court ordered the company to pay the claimant the value of her wages in EcoWatt tokens because the company failed to provide evidence that it had paid the claimant the appropriate amount for the alleged months in EcoWatt tokens.
In a dispute involving the payment of EcoWatt tokens as a portion of an employee’s salary, the court made a ruling in 2023 under judgment number 6,947. He claimed that although the court acknowledged that the employment contract included a token, it ultimately rejected the award amount in EcoWatt token.
