Calendar syncing between Office365 and latest Mac OS X iCal not working

Title says it all. Whenever I add or change any calendar entry either on the Mac or in Office 365 OWA, it does not get replicated on the other end. 

Please note that I'm not talking about Office for Mac, but native iCal. 

Mac is running OS X Yosemite. 

Syncing calendar with the iPhone works without any issues. Syncing email with the Mac Mail works as well. 

How can I fix this?

Thanks.