For a start off he may be average but still in the bottom group. Some forms are better than others. For example when I went to seondary school, the top maths set was made up of over half my form, wheras another form (four randomly distributed forms) had only four in the top maths set. Our form had none in the bottom set either.
Secondly, they may be in various groups for different things. Mine always had their group for maths, group for reading, group for writing, group for phonics, group for other things.
They were all loosely ability, except the group for other things which was aimed to be a group of children they wouldn't otherwise work with. They were called by different names (Like super squares) so they weren't obviously ability.
And if you have your facts from your ds they're not necessarily correct. I was spoken to by a friend who told me her dd was very upset about reading in year 1. She was the worst in the whole class and so embarrassed about how badly she read... Rather strangely I helped with that class with reading. I read with the second group, of which that child was in, and comfortably at the top end of the group.
Lastly: They will be very fluid if they are ability groups, my dc's always had some movement halftermly, and more frequently if a child changed noticably. Never a big thing about it, and the children always accepted it. And the next year's teacher will make her own mind up. Over the summer holidays, particularly in reading, some children change dramatically.