Dubai salary paid in cryptocurrency. Court mandates company to compensate employee with wages in dirhams and electronic currency.
In a precedent-setting ruling, a Dubai court has ordered a company to pay an employee's outstanding wages in both UAE currency and cryptocurrency as per their contract. The decision came after the employee filed a complaint against unfair termination. The court's decision, in case number 1739 of 2024, marks a progressive move in the financial sector.
The employee's contract specified payment in UAE dirhams and Ecowatt Tokens, a type of digital currency. Following the court's ruling in favor of the employee, the company was required to also pay the worker in Ecowatt Token. The dispute centered around the company not honoring the cryptocurrency portion of the salary and the alleged wrongful termination of the employee.
Representatives highlighted the significance of the court's decision, stating that paying wages in cryptocurrency is now legally binding in the UAE. This shift underscores the importance of employees' rights and aligns with Article 912 of the Civil Transactions Law.
Legal Consultants explained that the ruling reflects the flexibility of the UAE courts in adapting to modern financial practices. The acceptance of cryptocurrencies as a valid form of payment is a step towards integrating digital assets into the legal framework.
They have also emphasized that project tokens provided as part of an employment agreement, alongside traditional salary payment, were recognized by the court as a legitimate form of compensation. This decision is a victory for employees in the UAE amidst the growing popularity of cryptocurrencies and the emergence of Web3 projects.
While the UAE officially recognizes the dirham as its official currency and mandates wage payments through the Wage Protection System (WPS), the inclusion of alternative forms of payment like cryptocurrencies demonstrates an evolution in payment methods.
They have also elaborated that the court's evolution from its 2023 ruling to the 2024 decision signifies a willingness to adapt to the changing financial landscape while preserving contractual rights. Matta reiterated that the acceptance of cryptocurrencies in payment underscores a global trend towards recognizing digital assets as valuable financial tools.
The increasing popularity of cryptocurrencies in the UAE is evident, with real estate firms now accepting digital currencies as a form of payment. With this trend, industries like real estate, retail, and government services may adopt cryptocurrencies as a standard mode of transaction, fostering innovation and expanding economic possibilities in the UAE.
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