Dear Raj,
There appears to be confusion on the fundamental concepts of like type of leave and closed holiday. If you are from hotel industry then you must have been covered under Shops and Establishment Act. Please go through the Act that is applicable to your state and check whether definitions of these concepts are given in the act itself. If not then please educate yourself as well as others on these concepts.
In the instance that you have described, the issue is about acceptance to the change. All along management had been calling the staffs for work on National Holidays. Now to maintain continuity, they called personnel from Ops departments for work and not other office staffs. The change in decision in what was happening all along has incensed the workers. Hence the dispute (resulting out of inertia).
Do you have industrial standing approved by labour department? If not then first get these done immediately. Any decision taken under the provisions of the standing orders is unchallengeable in a court of law. Yes, theoretically the decision can be challenged but then courts do not intervene if the decision complies with the standing orders. In fact if your company has labour union and that too active one, then your management should have fabricated standing orders long ago.
On national holiday, there is no question of availing of casual leave. If labour asks for casual leave and if it granted also then labour is loser of triple payment plus loss of day's leave. This in itself could create a problem.
You have one more challenge of how to loosen the stranglehold of labour union. Try to come up with innovative ways to make sure that the union exists but it should be weak one. In your hotel, the union appears to be militant one. Talk to management and find out whether they are ready to launch Voluntary Retirement Scheme (VRS) for the old-time workers who are also union members. It is these few persons who could be holding the entire business to the ransom. The new generation employees are not so keen to be led by labour union. In fact, at lot of places, labour unions have become dormant and how come it is still active in your company that itself is little surprising.
Thanks,
Dinesh V Divekar