Tesla is overtly hostile towards German unions and has convinced enough workers to not join any. They have mostly hired foreign workers who are unaware of their rights. Additionally, workers are pressured to sign documents withdrawing from their right to compensation during sick leave which isn’t illegal.

Also, the state government of Brandenburg - the location of the Tesla factory - would rather see worker’s rights trampled than Tesla face consequences. Their future election results depend on Tesla performing.

Edit to add: As far as I know, Tesla doesn’t need to pay any damages if courts overrule them denying paid sick leave. They must only pay the sick leave and for the worker’s lawyer. Denying sick leave makes them more money in the end.