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.