"I was expecting them to be prosecuted because there was no question they were at fault," Joe's father Keith Barker said.
"The injuries to Joe and the time he spent in hospital fit the criteria for serious harm, so they should have been charged.
"They knew the gate was unsecured when it was open, so they knew it was a risk."
The Barkers hired lawyer Philip Schmidt to appeal the decision but it was again declined. They considered a private prosecution but the investigation and appeal process went beyond the six-month limit allowed.
"It was also going to cost us around $12,000, which would have meant selling our family home, with no guarantee of success."
Keith believed the company wasn't charged because of a previously good safety record. "It's like the police not charging someone for hitting a pedestrian because it is the first time it has happened."
Schmidt said the Labour Department failed its responsibility by deciding not to prosecute.
"It is a mystery to me when a serious breach of a statutory duty resulting in serious harm to a child has only received a warning," he said. "It was only good fortune that prevented a more serious head injury or worse."
A spokesperson for the Ministry of Business, Innovation and Employment said an improvement notice was issued to IPM Group ordering it to ensure the gates were installed properly and an effective system was in place.
The spokesman confirmed there was insufficient evidence to support a prosecution.
IPM Group director Warren Green did not return calls from the Herald on Sunday.