Legally and logically, there are two factors to be kept in mind before making a decision on this subject.
1. Does your establishment fall under the Factories Act or the Shops and Establishments Act?
2. Do you use 30 or 26 as the denominator for calculating one day's wages for loss of pay?
Factories Act and Using 26 as the Denominator
Most factories follow this for workmen. Let me recall here that the Factories Act does not provide for PAID WEEKLY OFF. Logically, one cannot deduct wages for a day when he or she is not paid for the same. When one uses 26 as the denominator, it excludes weekly off. Hence, intervening weekly off will be excluded and will not be counted.
Shops and Establishments Act/Factories Act Using 30 as the Denominator
The Shops Act is more liberal in terms of the number of days of leave. This legislation also provides for paid weekly off. Hence, one uses 30 as the denominator. Some of the factories also use 30 as the denominator. There are conditions provided for paid weekly off, like an employee is eligible for one day paid off if he or she has worked for the entire week. Hence, if an employee takes even one day off in a week, he or she is not eligible for paid weekly off. Hence, legally and logically, it is correct to include intervening weekly off with Casual Leave or Earned Leave or Medical Leave.
National Holidays
All employees are eligible for National Holidays, and under any stretch of imagination, legally it is not permissible to include the intervening National Holidays with CL or Earned Leave.
Festival Holidays
An employee is eligible for Festival Holidays if he or she has worked for 30 days in the last three months. If an employee has met this condition, then it is mandatory to pay for the intervening festival holiday.
The above logic is applicable where the benefits offered by the organization are minimum and as prescribed under the law. However, there are instances where organizations provide more leave benefits. Examine carefully the benefits. I have worked in a place where the conditions were as follows:
1. 5 days a week
2. 30 days earned leave in a year, 12 days CL in a year, and 12 days SL in a year
3. 10 days of National and Festival Holidays
4. Denominator used is 30
We used to include all intervening weekly offs. In fact, if an employee takes leave from Monday to Friday, the weekly off of Saturday and Sunday will also be included. However, we were careful not to include intervening National and Festival Holidays.