Mr. SKariah,
Question of "can" or "cannot" has no relevance. Question arises, if the employee gives a blank cheque, why an employer cannot accept that blank cheque? Law does not prescribe anywhere whether someone should or should not give or take a blank cheque to or from anyone, not merely in case of an employee. Law recognises only the validity of transaction, if made legally against any legal liability and for any legally valid purpose. So, it is up to the drawer of the cheque to be careful about the issue of cheque for any transaction, yet to occur in future, if not not issued against any current and real liability.
So, it is up to employee not to give a blank cheque, if he feels that the cheque can be misused. Once a blank cheque has been given he gives a golden chance to the employer to use or misuse that in any manner he likes. However, if any dispute arises later on account of dishonour or on account of any illegal transaction, the employer is supposed to prove the validity of the transaction, irrespective of whether he took a blank cheque or fully filled up cheque.