If your collegue was on "standby",she probably was not downgraded.was she waitlisted for the flight or did she have a confirmed reservation?Standby passengers are usually offered whatever seats are left after all others have been re-accomodated.

It may well be that her confirmed reservation was on a different flight but she was able to get a last minute seat.That is perhaps why some of your collegues were allowed more expensive seats than the travel policy allows.