H1 B extension using Remainder option

My friend worked and lived in US on H1b Oct 2007 - Feb 2011. (3 years 4 months). He returned back to India. Embassy did not approve his Visa.

New employer filed his visa in Sep 2012 using extension - USICS approval ( previous petition)

Got approval from USICS and visa approved till oct 2013

Query: can his employer file an extension this year and use the remaining years which he missed to live in US ( 2 years 8 months) as visa was denied

Yes, the employer can continue to file for extensions until he has spent 6 years on H-1 inside US.