G.R. No. 160509 - Mercury Drug Corporation vs. Serrano

On 5 June 1981, Mercury Drug Corporation (Mercury) hired Zenaida G. Serrano as a pharmacy assistant at its Recto-Soler Branch.
Her duties included attending to customers at the retail counter, processing orders, receiving payments, handling cash transactions, issuing receipts, and ensuring that each payment was correctly recorded in the cash registry.

On 5 November 1991, during her duty, Serrano allegedly pocketed a P120 payment corresponding to the sale of 10 capsules of Squalene-S.
Following an inquiry by General Manager Rolando Mateo and Supervisor Antonio Concepcion regarding the incident, Serrano submitted a resignation letter.
In the resignation letter, she admitted to the absence of an official receipt for 10 Squalene-S capsules and explained that, overwhelmed by several customers, she inadvertently failed to process the payment correctly.

Mercury did not accept Serrano’s resignation and, on 11 January 2002, summoned her before an Investigation Committee composed of three management and three rank-and-file employees.
The Committee unanimously found Serrano guilty of dishonesty, basing their conclusion on multiple witness testimonies and observations, including:

The manner in which the money was folded (described as “like a cigarette”), suggesting intent to conceal.
Testimonies from employees who observed Serrano’s behavior, including her appearing pale and nervous, and her improper handling of the cash transaction.
Accounts from two pharmacy assistants and an entrapment exercise involving a simulated customer, which further depicted an irregular, suspicious sequence of events.

Following the investigation, Mercury terminated Serrano’s employment by a letter dated 18 March 1992, effective 19 March 1992.
Serrano filed a complaint with the NLRC on 25 March 1992, alleging illegal dismissal, unfair labor practice, and non-payment of benefits.
The Labor Arbiter ruled in her favor, finding that Serrano had been framed-up, that Mercury had not suffered any loss, and that due process was violated in her termination.
Subsequently, the NLRC reversed the Labor Arbiter’s decision, dismissing Serrano’s complaint by holding that her act of dishonesty—being responsible for the misappropriation of the P120—was sufficient cause for termination regardless of the absence of actual loss.

Serrano appealed to the Court of Appeals, which reversed the NLRC ruling and reinstated the Labor Arbiter’s findings.
The Court of Appeals highlighted that Mercury’s notice of termination failed to specify the charge against Serrano, thereby denying her due process.
Mercury filed a motion for reconsideration, which was denied via a Resolution dated 21 October 2003.
Finally, the Supreme Court partly granted Serrano’s petition, upholding her dismissal on the grounds of loss of trust and confidence due to dishonesty, yet ruling that Mercury’s failure to observe full procedural due process (i.e., the absence of a proper first notice) warranted awarding Serrano P30,000 in nominal damages.

Whether Mercury had sufficient grounds to terminate Serrano’s employment for dishonesty and loss of trust and confidence, based on her alleged act of pocketing a P120 payment.
Whether the evidence, including contradictory witness testimonies and the manner in which the money was handled, conclusively proved Serrano’s misconduct.

Whether Mercury complied with the statutory two-notice requirement (first notice informing the employee of the specific charge, and a subsequent notice of termination).
Whether the omission of a detailed, written notice charging Serrano with the specific offense impaired her right to a fair hearing prior to termination.