I am a teacher, but have never come across WC, WB etc!
However, the 'W' stands for 'working towards (level 1)'.
I am guessing that the C and B have been used to indicate how far along the W level the child is. When children reach level 1, teachers use A, B and C to show whether the child is only just working at level 1 or has almost completed level 1. (These are called 'sublevels').
An 'A' is better than a 'C', so if I'm correct with your school's W levels, the progression would be as follows:
WC, WB, WA, 1C, 1B, 1A, 2C, 2B, 2A etc.
To give you some idea of how quickly a child is expected to move through the levels, schools aim to move children up two sub-levels each year e.g. from 1B to 2C. The national average level for a child leaving Year 2 is 2B.
I would say that a child working below level 1 at the end of Year 1 is below average.
Hope that helps!