The correct option is D She said that he would not be working on Monday.
Direct speech is a sentence in which the actual words of the speaker are quoted.
Indirect speech is a sentence in where we report what someone said, without quoting his exact words.
In Future Continuous Tense 'will be' changes into 'would be'.
Here, option D is correct. 'Will be' changes to 'would be'. Pronoun remains same as speaker is talking about other person here.
In option A wrong pronoun is used. So, it is incorrect.
In option B verb is wrong. So, it is incorrect.
In option C won't is contraction of will not. So, it is incorrect.