Dear Irfan
You have not mentioned whether you have your own leave policy. If not, you are to be governed by the statutory provisions of the Acts applicable to your establishment. There are two main Acts that provide for annual/ earned leave. One is teh factories fact 1948 and teh other is the shops and Establishments Act of your state. The issue is to be approached as under.
1) If your establishment indulges in manufacturing process an dis covered by Factories Act (on employing ten with using power or twenty without using power), you need to follow teh Factories Act. If so sec.79 of the Act excludes holidyas or off days falling during the leave period.
2) If your establishment is covered by Shops Act, then you have to refer the relevant provision in your state Act as it may differ from state to state. For example the Bombay Shops and Establishments Act include weekly offs falling during the leave period of the employee as part of the leave.
Hope this will clarify your doubt.
B.Saikumar
HR & Labour Law consultant
Chipinbiz Consultancy. Pvt.Ltd
Mumbai
Tel: 022-28324234