Appstore won't reject your app because compiled with version 8 but as your developer says, It will be better approach to compile the project with latest version of Xcode.
In addition, with iPhone X release, Apple probably look into support for iPhone X so If you send a new version without iPhone X support, It may be rejected and for iPhone X support, you need to use Xcode version 9 or later.
Apple Xcode Support:
You should use the latest version of Xcode available on the Mac App Store to submit your apps, or when available, the latest GM seed release from the Downloads page. For more information, read the App Distribution Guide.
Note: If your source codes are written fully with Objective-C then compile won't be problem because with Xcode 9 nothing changed on Obj-C side. However, If you have a swift code It may needed to be updated to Swift 4.