Somewhat off topic, but in the article linkes in the first post, there was a link to another article on how Cargolux exploits its pilots:
Airlines: Ein müder Pilot | ZEIT ONLINE.
In that case, it is not about contractor pilots but about driving their pilots through insane rosters, then spying on them if their are on sick leave and then having sick meetings and firing them. Pilots are so scared they don't dare call in sick. I don't want to have a 747C drop on me at some point because the pilot was sick and tired!
The article says that there have been allegations of sick meetings at RYR, too.
The pilots fired by Cargolux are now sueing them in Luxembourg. I wish them luck. Not sure what the legal system there is. According to the article, the health insurance sets what you may do when on sick leave. Their health insurance apparently even limited the times when they could leave their house. Incredible, this is like jail!
In Germany, this is defined by federal law rather than the individual health insurance. If you are on sick leave for back pain, you'd better not be caught laying bricks for your friend. However, you are welcome do to anything you need to keep you going (such as buy food) as long as it won't considerably worsen your illness.
If you are taking antibiotics for sinusitis and cannot fly because of risk of vertigo, as given as an example in the arcticle, in Germany, you may even enjoy the sun or go for a walk or cycle, as this is likely to improve your health.