Employers in Dubai can choose to pay employee salaries using cryptocurrencies following a recent ruling.
In considering a dispute over the recovery of unpaid wages, the Dubai Court of First Instance confirmed that employers can agree to pay all or some of an employee’s salary in cryptocurrencies and do not need to convert the value of those assets into fiat currencies to do so.
The ruling, which was based on the UAE Civil Transactions Law and Federal Decree-Law No. 33 of 2021, marks a change in case law in Dubai. The court had previously held that the payment of salaries via cryptocurrencies could not be enforced, where such payments were provided for in employment contracts, on the basis that there was not a clear and proper mechanism to estimate the equivalent fiat currency value of the cryptoassets.
Dubai-based experts Marie Chowdhry and Luke Tapp of Pinsent Masons said the ruling could influence how some employers write their employment contracts going forward – especially in sectors that embrace digitisation.
Chowdhry said: “This ruling could pave the way for the expansion of the application and use of digital currencies in different fields, which supports the vision of the UAE to be a regional, if not global, powerhouse for innovation and use of new technologies.”
Tapp said: “The judgment reinforces the idea that contractual provisions in employment contracts should be precise. Employers should ensure that any mode of payment used in the contract, whether fiat or cryptocurrency, is clearly stated and understood."
Chowdhry added: “This is certainly an area to watch closely – this judgment was given in the Dubai Court of First Instance and therefore may be challenged by a higher court. Typically, we look to judgments made in the Court of Cassation as final.”
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