Understanding Notice Period Deductions in Employment Contracts
The condition of notice in the unilateral exit clause of the contract of employment is introduced only for the purposes of orderly exit and affording the other party the time to make alternative arrangements. There may be a situation where either the employee or the employer may not be in a position to comply with this condition due to reasons beyond their control. That's why the clause for payment of salary in lieu of notice exists. Salary may mean the gross salary minus the amount of allowance to defray the special expenses, if any, associated with the performance of the duties of the job or the basic pay only as stipulated in the contract. However, the employer, as the superior party to the contract, has the prerogative to waive it entirely or in part at their discretion.
In the given case, the entire service up to the date of resignation is just three months, and probably that would have been paid by now. So, whatever notice salary is mentioned in the contract for three months has to be paid by the employee for a formal acceptance of their resignation. If so, their entire service in the organization for the three months so far becomes virtually a free service. Whatever the reason for the resignation or the financial status of the exiting employee, it won't look fair. My suggestion, therefore, would be a magnanimous gesture of waiving the entire notice amount or reducing it to one month's salary.