The Dubai Courtroom of First Occasion upheld the legality of crypto funds for salaries based mostly on employment contracts in a landmark ruling on August 15.
The choice issued in case quantity 1739 of 2024 (Labor Firm) marks a big shift within the UAE's judicial strategy to digital currencies, reflecting the rising acceptance of cryptocurrencies within the area.
Dispute over crypto wage
The case concerned a dispute the place the plaintiff, an worker, claimed unpaid wages, wrongful termination and different worker advantages.
Plaintiff's contract specified a month-to-month wage in fiat foreign money together with 5,250 EcoWatt tokens, a type of cryptocurrency. The courtroom dominated in favor of the plaintiff and ordered the employer to pay the owed wages in EcoWatt tokens, citing the employer's failure to offer proof of fee.
In response, the employer argued that the claimant was terminated for reliable causes and that the wage funds in EcoWatt tokens weren’t legally enforceable. Nonetheless, the courtroom discovered that the employment contract clearly stipulated fee in each fiat foreign money and cryptocurrency, and the employer didn’t present adequate proof to show that the EcoWatt tokens have been paid.
The ruling highlights the significance of clear contractual preparations and the UAE's readiness to adapt to trendy monetary practices. It additionally represents the newest step within the nation's progressive strategy to the adoption and regulation of the crypto business.
Reversal of earlier judgment
The ruling contrasts sharply with an identical case in 2023 through which the identical courtroom dismissed a lawsuit involving EcoWatt tokens. On this case, the worker's failure to offer a transparent valuation of the cryptocurrency led to the courtroom's refusal to implement fee.
The 2024 choice highlights the courtroom's evolving stance on digital currencies. By recognizing cryptocurrencies as a sound type of reward, the courtroom has set a precedent that would encourage wider adoption of digital currencies in quite a lot of industries, together with employment.
The choice was based mostly on Article 912 of the UAE Civil Transactions Regulation and Federal Regulation No. (33) of 2021, which governs the dedication and fee of wages.
Because the nation continues to place itself as a worldwide innovation hub, the choice could pave the way in which for additional integration of digital currencies into the area's authorized and financial frameworks.
