No one can tell you because schools are doing their own thing. It would seem likely to be GCSE grades, but 'working at' a grade 8 in KS3 would be rather unusual, so it could also be some sort of target grade.
At our school they will 'seem happy' if the child is trying irrespective of their actual attainment. So I think you should find out what their grading means. After all, they're reporting it to you so presumably they want you to find it meaningful.
It could be old NC levels (though the 8 for art makes it suspect) It could be 'carry on like this and you are on track for this GCSE grade' It could be some school specific scale.
If you don't ask, and later you discover they were flagging up your child was going to fail / not get what you want for GCSEs, then you'd be pretty cross with yourself.
The 8 was in art if that makes a difference If it's like dd's school that means she's doing very well in Art. Like an old A*. 7 like an old A and 6 is like an old B i think. (Grading of how well she's doing at the year 7 work rather than how she would do if she took gcse now obviously!) Did the art teacher say at the parents' eve that she is doing very well? If so that suggests it might be the same grading system as dd's school.
Ok heard from the year 7 head. They are grade levels from 1-9, so like the new gcses but based on what they are learning now, rather than her being already at A* standard in GCSE art . She's doing really well in art although at the moment I think its probably because she doesn't muck about rather than any massively latent talent. After CATS she got a baseline assessment of 5 in science (so a high C??) but is working at a 6/7 (a high B?? A-ish??). Basically she's doing well.