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05.01.2022

The Supreme Court clarified what constitutes discretionary power

Discretionary power may consist of a choice to act or not to act, and if to act, to choose an option of decision or action from among the options directly or indirectly enshrined in law. An important feature of such a choice is that it is carried out without the need to agree on the option of choice by anyone.

This was emphasized by the Supreme Court as part of the panel of judges of the Cassation Administrative Court in case No. 1840/2970/18 .
The circumstances of the case
It is known from the case materials that the plaintiff appealed to the Sumy District Administrative Court with a statement of claim against the Budil village head Volodymyr Oleksiyovych Shkurk for recognition as unfounded and the cancellation of the award order as adopted in violation of the Award Regulations.
The plaintiff motivated his demands by the fact that, in violation of the Regulation on bonuses, in the submissions and the order on bonuses, there was no assessment and comprehensive analysis of the employees' performance of their duties and tasks for December 2017, for which merits the village council employees received New Year's bonuses with the same percentage.
The decision of the Sumy District Administrative Court, which was left unchanged by the decision of the Kharkiv Appeal Administrative Court, rejected the claim.
Refusing to satisfy the claims, the court of first instance, with whose conclusions the appellate court agreed, proceeded from the fact that the order contested by the plaintiff was well-founded and not subject to cancellation.
The plaintiff's arguments that the awarding of employees of the Budil Village Council for December 2017 took place without complying with the requirements of the Regulations on Awarding, due to the lack of analysis of the performance of employees, were considered unfounded by the courts of previous instances, since the Awarding Regulations do not provide that when awarding employees, it is it is necessary to specify the analysis of each awarded employee based on the results of the month.
Conclusion of the Supreme Court
The Supreme Court emphasized, after conducting an analysis of legal acts regulating disputed legal relations, it is worth noting that none of them stipulates that when awarding employees, it is necessary to indicate the analysis of each awarded employee based on the results of work for the month. Moreover, the awarding of employees took place within the framework of the wage fund.
On the 26th session of the 6th convocation of the Budil village council dated 07.02.2013, the Regulation on awarding and providing material assistance to employees of the village council institutions (hereinafter referred to as the Regulation) was approved.
Thus, according to the Regulation (26th session of the 6th convocation of the Budil Village Council dated 07.02.2013, the Regulation on awarding and providing material assistance to employees of village council institutions (Regulation) was approved), awards are made in accordance with their personal contribution to the overall work results based on the results of work, on on the basis of an assessment and comprehensive analysis of their performance of official duties and tasks, however, the specified norms do not provide for the obligation to indicate in the submission and/or order the specific facts and circumstances that were analyzed by the manager when deciding on the issue of bonuses for specific employees, it is not determined that carrying out analysis should somehow be reflected in writing in the award order, etc.
In addition, the Supreme Court emphasized that the failure to specify in the order the facts that would indicate the analysis of the performance of duties and tasks by the employees does not mean that the secretary of the village council and/or the head of the village council did not conduct such an analysis when deciding on bonus issues.
Taking into account the above, the Supreme Court agreed with the conclusions of the courts of the previous instance that the contested order of the Budil village head on awarding No. 11 dated 12.20.2017 is justified and adopted in compliance with the requirements of the current legislation.
The Supreme Court also noted that awarding and setting the appropriate allowances is carried out within the existing wage fund and belongs to the discretionary powers of the employer. In addition, the right to set allowances and bonuses belongs precisely to variable discretionary powers, by virtue of which the employer is free to choose within the approved budget to set them or not to set them.
The Supreme Court notes that discretion is not an obligation, but the authority of an administrative body, since the legal concept of discretion provides for the possibility of choosing between alternative ways of action and/or inaction. If the legislation provides for the adoption of only a certain specific decision, then this is not the exercise of discretion (powers), but the fulfillment of an obligation.
Discretion is a necessary and irreplaceable legal construction for the management activity of an administrative body, thanks to which a number of important tasks are solved, the central of which is the provision of fair, effective and focused on the individual needs of a private person, law-enforcement and law-making activities of the named subjects.
Discretion is not arbitrary; it is always carried out in accordance with the law (law), since according to the second part of Article 19 of the Constitution of Ukraine "state authorities and local self-government bodies, their officials are obliged to act only on the basis, within the limits of authority and in the manner provided for by the Constitution and by the laws of Ukraine".
The binding of the administrative body's discretion by the law (right) makes it possible for administrative courts to review decisions (actions) taken by the administrative body as a result of the exercise of discretionary powers.
Thus, discretion is an element of managerial activity. It is related to the authorities and their bearer bodies – state power and local self-government, their officials and officials. Discretion should not be identified only with formalized powers, it is characterized by the absence of unambiguous regulatory regulation of the subject's actions. At the legislative level, the concept of "discretionary powers" of the subject of power does not exist. In judicial practice, a position has been formed regarding the concept of discretionary powers, which should be understood as such powers when, within the limits defined by law, the administrative body has the opportunity to independently (at its own discretion) choose one of several options for a specific lawful decision. At the same time, the powers of state bodies are not discretionary when there is only one legitimate and legally justified option for the behavior of the subject of power. Therefore, in the event of the occurrence of the conditions defined by the law, the defendant is obliged to take specific actions and, if he does not take them, he can be obliged to do so in court.
That is, the discretionary power may consist in the choice to act or not to act, and if to act, then in the choice of a decision or action option among the options that are directly or indirectly enshrined in the law. An important feature of such a choice is that it is carried out without the need to agree on the option of choice by anyone.
The administrative court, verifying the decision, action, or inaction of the subject of power for compliance with the criteria established by the second part of Article 2 of the Civil Code of Ukraine, does not interfere with the discretion (free judgment) of the subject of power beyond the scope of checking according to the specified criteria. The task of administrative justice is not to ensure the efficiency of state administration, but to guarantee compliance with the requirements of the law, otherwise the principle of separation of powers would be violated.
Returning to the stated cassation requirements, the Supreme Court noted that the plaintiff did not substantiate how, in the event of non-payment of bonuses to employees in accordance with the contested order of the defendant and, accordingly, the surplus of funds in the wage fund of the village council at the end of the calendar year, the rights of the plaintiff could be affected.
Thus, in accordance with Part 1 of Article 5 of the Civil Code of Ukraine, every person has the right, in accordance with the procedure established by this Code, to apply to an administrative court if he believes that his rights, freedoms or legitimate interests have been violated by a decision, action or inaction of a subject of authority, and ask for their protection.
However, belonging to one territorial community within the competence of the Budil village council, without stating specific reasons for the violation of the plaintiff's rights as a result of the appointment and payment of bonuses to employees of the Budil village council, cannot serve in this case as a sufficient basis for proving the fact of the violation of the plaintiff's rights.
Taking into account the above, having assessed the arguments of the cassation appeal based on the case materials and the correctness of the application of the norms of substantive and procedural law by the courts of previous instances, the Supreme Court came to the conclusion that the courts of previous instances did not allow incorrect application of the norms of substantive law and violation of the norms of procedural law, and therefore the cassation appeal is subject to abandonment without satisfaction, and the challenged court decisions – without changes.
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