Is Bereavement Leave an allowable cost under TSC Option E

We are using a TSC contract option E for the provision of Access & Insulation Services.

Two of the contractors employees have claimed bereavement leave, which under the working rule agreement National Agreement for the Engineering & Construction Industry (NAECI) the contractor is obliged to pay bereavement leave at basic rates of pay.

As the contract is costs reimbursable, these costs have been claimed in their most recent application.

Is the service manager obliged under the TSC, Option E to pay these costs?


Under option E, clause 11.2 (5) Defined Cost is “payments by the Contractor in Providing the Service for - people who are employed by the Contractor” (and other bullets for Plant and Materials, Equipment etc.).

While these people are assigned to the contract, then my view is that these are legitimate payments as to provide the service the Contractor has to employ people and under the working rule agreement, he has to pay these employment costs. I can see a counter argument to this is that while they (the People) are on bereavement leave, they are no longer providing the service, but to me, as it is “the Contractor” to which “Providing the Service” applies, this counter argument does not stand up.

However, if a replacement person is brought in, then these people would no longer be employed by the Contractor to Provide the Service, but would be general employees, so the costs would fall upon corporate overhead. Equally, after a “reasonable” - whatever that is in practice - time, even if no replacement person was brought in, I think it would slip into corporate overhead.