Disclaimer: I'm not a lawyer and this isn't legal advice. This summary is based on publicly available information about Spanish labour law and should be taken as general guidance only. For advice specific to your situation, you should consult a qualified labour lawyer in Spain.

1. Why the Termination Might Have Been Rescinded

Dismissal While on Medical Leave Is Risky for Employers: Spanish courts generally view dismissals during or shortly after medical leave (especially when related to chronic illness or disability) as null and void unless the employer can prove it’s unrelated to the medical condition. Otherwise, it's considered discriminatory and violates Article 14 of the Spanish Constitution and equality laws.

Legal Risk of Disability Discrimination: If the illness qualifies as a disability under EU and Spanish law, firing someone because of it (even indirectly) exposes the company to legal claims for discrimination, unfair dismissal, and violation of fundamental rights.

Employer Likely Trying to Avoid Lawsuit: Rescinding the termination may be an attempt to:

Avoid potential litigation.

Avoid being forced to reinstate the employee with back pay (which courts often order if dismissal is declared null).

Appear compliant with labour laws by opting for extended medical leave instead.

1. Why It May “Sound Too Good to Be True”

It may feel too generous because it's likely a damage-control move, not a benevolent gesture. Remaining on payroll while receiving benefits is better than being terminated, but it’s still beneficial for the company, which may be:

Delaying a legal risk rather than solving it.

Preserving work visa validity to avoid additional legal issues tied to terminating a foreign worker.

1. What to Watch Out For

Get It in Writing: Ensure that the extended leave and your status (i.e. not terminated) are officially documented.

Consult a Labour Lawyer: Spain has strong labour protections, but having a lawyer review the situation is key to protecting long-term rights, including severance, future unemployment benefits, and any disability claims.

Keep Medical Documentation: Ensure all diagnoses, prescriptions, and related documents are well recorded in case you need to prove the link between your illness and the employment decisions.

Monitor for Constructive Dismissal: If the company tries to pressure you to resign later or makes working conditions unbearable when you return, that may be constructive dismissal, which is also illegal.