The Employee Masterfile has a flag that you can tick to make an employee inactive. This setting by default will make the employee not visible in the employee list when using the F2 option to search in the Employee Code field.
To be able to see or select Inactive employees and make changes to them do the following;
Open Payroll, Masterfiles, Employee Details, Maintain.
On the Employee Code field, select Find F2 and then Showinactive F7.
Inactive employees are now visible and highlighted in red so you can select them.
Untick the Inactive (Yes) flag on the Details tab, which will change the setting to No.
Click Accept (F9) to accept the change. The employee will now be active and by default able to be seen in the search list.