Hong Kong's top court on Tuesday denied the city's refugees—some of who live in slum-like conditions—the right to work, disappointing activists who say the decision is likely to force more refugees into deeper poverty.

The financial capital's treatment of refugees has come under fierce criticism in recent years. Until a court ruling last year, Hong Kong refused to handle many asylum requests, effectively outsourcing them to the local office of the U.N. High Commissioner for Refugees, which helped refugees find homes elsewhere....