That is the release version of RHEL, or at least the release of RHEL from which the package supplying /etc/redhat-release was installed. A file like that is probably the closest you can come; you could also look at /etc/lsb-release.
It is theoretically possible to have packages installed from a mix of versions (e.g. upgrading part of the system to 5.5 while leaving other parts at 5.4), so if you depend on the versions of specific components you will need to check for those individually.