I've never heard of this, tbh.
At dd's school, they have 'Certificate Assemblies' every week, and one or two children from each class get awarded certificates, and one child from the whole school gets the Head's 'special' certicate. They can be given for anything from academic achievement to making a special effort, and I once heard a girl being commended for being particularly caring and considerate to her classmates that week.
I actually think it does matter if some kids never get one at all, and others get them all the time (my dd has had several, its not sour grapes I really just do believe that). At the age of 5 there is a huge danger of kids learning the lesson that they are no good/can't win/never get seen - not what anyone would want. OTOH, not everyone gets an award each week - or even each term - so when they do, it does count. The kids are thrilled to get them, right up to Y6 (as far as I can see - I've sat in on a few, as I help with reading that day).
As for parents being invited, no, they aren't, ever - though they would be welcome to sit in if they asked. I'd be more concerned, though, about how the kids would feel than the parents.
There may be a special end of year prize thingy, of course, I've yet to find out...dd being in Reception...