One of the questions that causes the most anxiety during an extended medical leave is whether the company can dismiss the worker precisely for being on leave. The answer has important nuances worth knowing, both so you don't feel falsely secure and so you don't panic without reason.
Dismissal during leave isn't banned, but it is restricted
Contrary to a widespread belief, being on medical leave doesn't grant absolute protection against dismissal. A company can dismiss a worker who is on leave, but it cannot cite the leave or illness itself as the reason for the dismissal, except in very specific, regulated cases that do allow it. If the dismissal is genuinely based on the worker's leave without fitting any valid legal cause, it can be ruled null and void, with the more favorable consequences for the worker that classification carries (mandatory reinstatement with back pay for the period of proceedings).
When a company can terminate a contract due to incapacity
There's a specific ground for contract termination tied to a worker's supervening unfitness for the job, which can apply when, after an extended leave, it's established that the worker can no longer perform their job adequately, following the relevant medical report. This route has its own requirements and isn't the same as "firing someone for being on leave": it requires a formal medical assessment of unfitness for the specific job, not a simple unilateral decision by the company based on how long the leave has lasted.
Disciplinary dismissal or dismissal for other reasons during leave
Medical leave doesn't shield a worker from a disciplinary dismissal for reasons unrelated to the illness (for example, a serious offense committed before the leave, or even during it if compatible with their condition), nor from a collective or objective dismissal for economic reasons affecting the whole workforce or their specific position, as long as the reason cited is genuine and not an excuse to disguise the real motive (the medical leave).
What happens to the severance settlement if you're dismissed while on leave
If the dismissal occurs while you're on medical leave, the severance settlement must include, besides the usual items (unpaid salary, unused vacation days, prorated extra payments, and severance pay if applicable), the correct settlement of the temporary incapacity benefit accrued up to the effective date of the dismissal, coordinating responsibility between the company and the mutual insurance provider or Social Security depending on who was managing the leave at that time.
What to do if you suspect the dismissal is really due to your leave
If you believe the real reason for your dismissal is your medical leave, even though another reason is formally cited, it's important to gather all available documentation (communications with the company, medical reports, witnesses) and consult a labor law specialist or employment lawyer as soon as possible, given the short deadlines for challenging a dismissal in Spain.
Review your severance settlement before signing it
If you find yourself in this situation, our severance pay calculator lets you make an initial estimate of the items that should be included in your final settlement before accepting the company's proposal.