Answered: NEC3 ECC: Option C: Inclusion of People under Defined Cost for CE's

The answer can be found in:
1). Core Clause 63.1 which explains how compensation events are assessed,
2). Option C Clause 11.2(23) which gives a definition of Defined Cost, and
3). the Schedule of Cost Components.

If the people described meet the requirements of the Schedule of Cost Components then they are included in the Defined Cost.

Clause 63.1 confirms that the changes to the Prices are assessed as the effect of the compensation event on the Defined Cost. To calculate the effect on Defined Cost you need to calculate the Defined Cost of the original works, and the Defined Cost of the revised works. The difference between the two is the effect of the compensation event on the Defined Cost. Add the Fee to this  figure to calculate the change to the Prices.

If the People are full time (100%) on your project now, and they have spare time to do this extra work then the PM is correct. However if the People are say 70% on your project now and the CE will increase their time to say 75% then the PM is not correct.

The Guidance Notes for clause 63.1 are very informative in relation to this topic.

I hope this answer is clear, but if not please do come back.