Just boot virtually any Linux CD live version and copy off the work related files you need from the employee's hard drive. I prefer Ubuntu but lots of live versions are out there the would work just as well. At that point you have the option of reformatting and reinstalling Windows - or not. If you choose not to reformat then you can use one of several tools that are available (under Linux again) to clear the password and set your own password.
You could also take him to court to get him to reveal the password. Personally I'd ask first and then if he proves reluctant to give you the password you have the other two (or three) alternatives.